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Searching for the Global Consumer:

A European Study of Changing


Lifestyles and Shopping Behaviour

ACKNOWLEDGEMENTS
The preparation of this research report involved the contributions of many individuals over a period of more than six months.
Wed like to thank 2002 ECR Europe Conference Co-Chairs Robert Wilkinson, vice president, Coca-Cola Greater Europe, and
Friso Coppes, vice president, Royal Ahold, and Marco Thyssen of ECR Europe for their support.
We would also like to thank the following retail and consumer products companies for their time, support and valuable insight:
Ahold Supermercados (Spain)
Albert Heijn (Netherlands)
Alcampo, S.A. (Spain)
Aldeasa (Spain)
C&A (Germany)
C1000 (Netherlands)
Carrefour (France)
Carrefour (Spain)
Champion (Spain)
Coca-Cola Espaa (Spain)
Compar S.p.a. - Bata (Italy)
Coop s.c.a.r.l. (Italy)
Coop Norge (Norway)
Danone, S.A. (Spain)
De Bijenkorf (Netherlands)
Dia (Spain)
E. Leclerc (Spain)
El Corte Ingls (Spain)

Enaco (Spain)
Gallina Blanca (Spain)
General Mills Ibrica (Spain)
Grupo Panrico (Spain)
Gruppo Lombardini S.p.a. (Italy)
Hema (Netherlands)
IKEA (France)
Industrie Natuzzi S.p.a. (Italy)
James Dillon Sportswear S.p.a. - JDS (Italy)
Kimberly-Clark (Spain)
Kraft Foods Espaa, S.A. (Spain)
K-rauta (Finland)
Kronenbourg (France)
Lever Faberg (Spain)
Liabel S.p.a. (Italy)
Lindex (Sweden)
Mail Boxes Etc. (Italy)
Marks & Spencer (United Kingdom)

McGregor Fashion Group (Netherlands)


Nestl Espaa, S.A. (Spain)
Norgesgruppen (Norway)
Noroto, S.A. (Spain)
Nottington Italia S.p.a. - Geox (Italy)
Nutrexpa (Spain)
Peroni Industriale S.p.a. (Italy)
Perrier Vittel France (France)
Prisma (Finland)
Procter & Gamble (Germany)
Procter & Gamble (Spain)
S.I.C. S.p.a. - Ipercoop (Italy)
Statoil Detaljhandel Skandinavia (Sweden)
Systme U (France)
The Joyco Group (Spain)
Trumf (Norway)
Volendo S.p.a. (Italy)
Vroom & Dreesmann - V&D (Netherlands)

Gratitude is owed to the Cap Gemini Ernst & Young country teams who contributed data, supporting information and insight,
and who spent many hours interviewing consumers and industry executives whose comments add life and perspective to
the quantitative research. Our thanks go to:
Finland: Juha Mustakangas
France: Philippe Jacquier, Anne Gabet, Jean Tassin, Gilles Nouailhetas, Julien Fulachier
Germany: Elina Kuusisto, Kimi Uriu, Martin Bassler, Daniel Haudenschild
Italy: Andrea Mazzucato, Rosanna Sassi, Lorenzo Servadio, Claudia DellOsso
Netherlands: Matty Geertsen, Alice van Eekelen, Gertjan de Ruijter
Norway: Stein Bertinussen
Spain: Jean-Marie Benaroya, Jose Carvajal Martinez, Ignacio Garca de Sola
Sweden: Johan Nordquist, Ulf Nilsson
United Kingdom: Richard Hull, The Co-operative Group
Finally, the project would not have been possible without the efforts and dedication of the Cap Gemini Ernst & Young core
team: Stella Goulet, program sponsor; Roberto Iorio, program sponsor and ECR Europe liaison; Raffaella Poggio, program
manager; Mary Manning, content and analysis coordinator; Nina Groothuijzen, marketing and communications manager; and
Priscilla Donegan, publications editor.

Fred Crawford
Executive Vice President
Global Managing Director
Consumer Products, Retail & Distribution
Cap Gemini Ernst & Young

All rights reserved.


No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, or
stored in any nature, without the written permission of the copyright holder.
2002 by Cap Gemini Ernst & Young

Price: 50 euros

Searching for the Global Consumer:


A European Study of Changing
Lifestyles and Shopping Behaviour

CONTENTS
Introduction: Through the Consumers Eyes

Executive Summary: Searching for the Global Consumer


Research Methodology: About the Study
Consumer Responses Overall
The Value of Values

5
5
6
6

Consumer Relevancy: A New Model to Drive Strategy and Growth


The Key Pillars of Consumer Relevancy
The Convergence of Three Megatrends

7
7
7

European Overview:
How Consumer Relevancy Plays Out Across Europe
Consumer Relevancy: A European View
Close-up on Consumers
What Consumers Really Want
Data Points to Lack of Differentiation
Net Returns: Online Shopping Remains Low
Where Countries Differ
At a Glance: Consumer Sensitivity to Retail Attributes by Country

8
8
9
9
10
10
11
11

The Countries
Finland: Store Preferences Stand Out
Prisma: Providing Value for the Money
K-rauta: Thriving in the Changing DIY/Hardware Market

12
13
14

France: Shoppers See Well-Defined Value Propositions


Carrefour: Where Access and Product Meet

15
16

Germany: Not by Price Alone


C&A Finds its Focus

18
20

Italy: High Expectations From Demanding Consumers


Divani & Divani by Natuzzi: Driving Trends in the Furniture Market
Gruppo Lombardini: Where Tradition and Innovation Meet

21
23
23

Netherlands: Making Good On Promises


The Albert Heijn Experience
Hema: Private Label Is Key to Product Dominance

24
25
26

Norway: Stores Struggle for Differentiation


Work in Progress: Coop Norge Assesses
its Relevancy Positioning

27
29

Spain: Shopping Is Serious Business


Aldeasa: Access is the Pillar of our Business

30
31

Sweden: Where Service Reigns Supreme


Statoil Detaljhandel: Making Everyday Life Easier for Customers
H&M: Balancing Price and Quality

33
34
35

United Kingdom: Strong Retail Brands Dominate


Marks & Spencer: Finding its Footing in Food

36
38

Endnote: How to Become Relevant to Consumers

39

Through the Consumers Eyes


The key to future commercial success lies in the ability to conduct business
on terms that consumers find meaningful on a personal level.

If you think European consumers are


looking for the lowest prices, the best
quality products and lots of value-added
services from their shopping experiences,
youre wrong. In fact, what they are
searching for is very different. Consumers
today are looking for something more akin
to human values, rather than just product/service value from their commercial
transactions.
So, whats going on here? It all comes
down to changing lifestyles. Evidence of
constantly evolving consumer lifestyles is
all around us lifestyles that are increasingly complex and difficult to define.
Consumers no longer fit neatly into marketing segments, but are rather instaviduals who jump between many segments
during the week, and even during the
course of the day. This new environment
makes traditional marketing techniques
obsolete, and many executives today are
struggling to understand the new lifestyle
needs of consumers in order to remain
relevant in the marketplace.
Getting to the heart of todays changing
consumer clearly requires more than
traditional methods and traditional
answers. The need for a new approach
became clear as a result of research
conducted by Cap Gemini Ernst & Young
over the past three years with more than
10,000 consumers in the United States
and most recently with an additional

6,000 consumers across nine European


countries. During the course of this
research, consumers were asked about
their shopping experiences and their
relationships with business. What we
found was startling and led us to develop
a new model for corporate success a
model we call Consumer RelevancySM.

Great Companies Never Try to Be the Best


at Everything, written by Fred Crawford,
Executive Vice President and Global
Managing Director, Cap Gemini Ernst &
Youngs Consumer Products, Retail and
Distribution practice, and Ryan Mathews,
a futurist with FirstMatter LLC, and
published by Crown Business.)

Over and over, our survey respondents in


both Europe and the U.S. pointed to the
importance of human values such as
honesty, respect, dignity, trust and fairness
surrounding their transactions.

Consumer Relevancy provides the basic


go-to-market strategy and conceptual
foundation for competitive positioning
around human values. (For a more
detailed look at the Consumer Relevancy
model, see Consumer Relevancy: A New
Model to Drive Strategy and Growth,
page 7.)

These learnings formed the foundation for


Consumer Relevancy, a strategic construct
that provides a company with the ability
to see business through customers eyes
and conduct business on terms that customers find meaningful on a personal
level. Consumer Relevancy is based on a
model that says companies neednt and,
in fact, shouldnt try to be great at everything. Because most businesses focus on
increasing the value of a transaction rather
than worrying about the values surrounding the transaction, they almost intuitively
adopt strategies aimed at becoming the
best at every aspect of a transaction. This
approach leads to a significant over-investment and a lack of enterprise focus, which
in turn confuses and alienates customers.
This misguided strategy has been termed
the myth of excellence. (See the business
best-seller The Myth of Excellence: Why

The report youre about to read offers a


detailed analysis of the results of consumer
research in nine European countries:
Finland, France, Germany, Italy,
Netherlands, Norway, Spain, Sweden and
the United Kingdom. What do consumers
in Europe really want from their shopping
experiences and how does that contrast
with our results in the U.S.? How can a
retailer capture the hearts and minds of
consumers? And how does this translate to
share of wallet and store loyalty? The
answers to these questions provide the
foundation that will allow you to understand how changing lifestyles and the new
language of consumers will impact your
business today and tomorrow.

Executive Summary: Searching for the Global Consumer


Leading-edge consumer research conducted across Europe provides insight
into the factors that drive buying behaviour and impact shoppers relationships
with retailers.
The emergence of the global consumer is a topic discussed with greater and greater frequency as a result of the increasing globalisation of the retail business and the subsequent
blurring of country borders. But is there truly a global consumer? The answer, it appears,
is yes and no.
The results of our European research and the findings of our earlier U.S. studies make it
clear that consumers throughout many of the worlds major industrial economies today
are looking for the same thing from retailers: They are demanding that companies recognise them as individuals and conduct business on their terms. Retailers that seek to meet
the demands of todays empowered, socially aware and increasingly global consumers
must understand the common factors driving buying behaviour. However, at the same
time, national subtleties are apparent in each of the nine countries we analysed. The ability to decipher these unique factors and understand the critical role they play in shaping
consumers relationships with retailers in a specific market is as important as recognising
where the similarities lie, particularly for companies operating across a number of countries.
Our research with thousands of European consumers uncovered five key findings:
1. Human values have become the contemporary currency of commerce.
2. When it comes to the five attributes of a commercial transaction price, product,
service, access and experience consumers and businesses are speaking two very
different languages.
3. The majority of consumers are hard-pressed to identify favourite stores in many
retail channels in the nine countries.
4. Retailers in general are not well differentiated in the minds of consumers in terms
of their value propositions.
5. Demographics make a difference: Throughout most of the countries, women were
much more likely than men to rate the factors related to shopping satisfaction as
extremely important, while younger consumers (those between 15 and 34) were
less apt than older shoppers to do so.
Human Values: Todays Commercial Currency

Consumers today are crying out for honesty, respect, dignity, trust, consistency and
fairness, and they will respond to companies that reflect these human values in their
interactions with customers. When consumers were asked to identify the key factors that
they considered to be extremely important in determining their shopping satisfaction,
they consistently pointed to values-oriented factors. In contrast, traditional factors related
to product and service value, such as features and functions, were much less significant.
The most important of the human values that consumers look for from companies is
honesty, followed by respect and reliability.
The Role of Retail Attributes: Price, Product, Service, Access and Experience

A chasm exists today between what consumers are looking for from retailers and what
companies are offering. Bridging this gap requires an understanding of the new language

Research Methodology:
About the Study
The objective of this European study
was to examine the forces driving
shopping behaviour in order to better
understand what consumers are looking for from their retail experiences.
Cap Gemini Ernst & Young worked
with ORC International, the global
research operating unit of Opinion
Research Corporation, to conduct the
research. ORC International surveyed
6,000 consumers in nine European
countries: Finland, France, Germany,
Italy, Netherlands, Norway, Spain,
Sweden and the United Kingdom. The
composition of the consumer sample
in each country was based on projectable national samples representative of the population from the standpoint of region, age and gender.
Regional breakdowns in each country
were aligned with those used by
ACNielsen.
The research model was based on
comparable studies conducted in the
United States. The survey vehicle consisted of a questionnaire comprising
51 statements related to the five basic
attributes of a commercial transaction:
price, product, service, access and
experience. Respondents were asked
to indicate the degree of importance of
each factor to their shopping satisfaction using a numerical scale of 1 to 5
(with 1 being not important and 5
being extremely important).
The survey also measured shopping
frequency for six core channels (supermarkets, discount stores, department
stores, health and beauty stores,
clothing/shoes/accessories stores and
speciality stores) and in France, Spain
and Italy, the hypermarket channel. In
addition, consumers were asked to
identify their favourite stores by channel as well as the primary and secondary reasons for shopping at those
stores. Also included were questions
concerning Internet shopping, cost
perceptions related to the introduction
of the euro and the importance of
values to respondents.
The projects quantitative research was
supported by numerous case studies,
interviews with retail and consumer
product company executives, and
consumer face-to-face interviews in
the nine countries.
5

of consumers and the way in which they


define the five retail attributes, as reflected
in the responses from European shoppers.
In the case of price, for instance, honest
price was clearly the most important
factor and far outweighed lowest price.
With regard to product, more European
shoppers cited consistently good merchandise quality as extremely important
rather than top-quality products.
Concerning service, the importance of following through on the basics of customer
service, such as returns policies, was
apparent in Europe. By comparison, valueadded services such as how-to classes,
loyalty cards and delivery services were
far less important. When it came to access,
European consumers made it clear that
what goes on inside the store, such as

Top Consumer Responses Overall


Europe Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

Employees are courteous and respectful

69%

The retailer provides consistently good


merchandise quality

67%

The price is easily visible, the price is


well marked

64%

You can unconditionally return merchandise


with which you are unhappy

60%

Bottom Consumer Responses Overall


Europe Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

You receive phone calls or mail informing


you of sales or special events

13%

The store plays music or videos that


enhance the shopping experience

12%

You can buy from the retailer through


catalogues or mail order

10%

You can buy from the retailer over the Internet

7%

The findings of our European research may come as a


surprise to anyone who thinks that the best quality products, the lowest prices and a bevy of value-added services are the most important factors to shoppers. The
study makes it clear that the traditional method of
appealing to consumers solely through features and
functions no longer meets the needs of todays consumers. Respondents in Europe confirmed our earlier
U.S. research by pointing to more humanistic, valuesoriented factors such as courteous and respectful
employees and consistently good quality product. It is
interesting to note that the top five overall responses in
the nine European countries mirrored those in the U.S.,
with a slight difference in rank order.

cleanliness and ease of navigation, was


more important than external aspects such
as the location of the store or convenient
parking. And on the attribute of experience, European consumers were more
concerned with being treated in a respectful and courteous manner than they were
with being entertained in the store.
Favourite Stores: The Choice Is Not
Always Clear

When consumers were asked to name


their favourite stores in the key retail
channels, a surprising number did not
demonstrate a clear preference. The lack
of store brand loyalty was apparent even
in frequently shopped channels such as
supermarkets. In Spain, for instance, 41
percent of consumers could not name a
favourite supermarket; in Germany, 38
percent could not; and in Norway, 34 percent could not identify a favourite supermarket. In some countries, this was the
result of a fragmented retail environment
dominated by regional or local companies.
In others, it reflected the weakness of an
individual channel. But in some cases, it
is reflective of a certain apathy even
discontent that exists among consumers
regarding the stores in which they shop.
This dissatisfaction was apparent in many
of the face-to-face interviews we conducted. In addition, retailers in general even
many that were named as favourites
were not well differentiated in the minds
of consumers based on the Consumer
Relevancy model of dominating on one of
the five attributes and differentiating on
another. In country after country, across
most channels, the positioning of retailers
in the market was unclear, judging from
the disparity of responses among the
consumers we surveyed. These findings
indicate that a substantial opportunity
exists for retailers to gain the loyalty of
these disenchanted consumers if they
can clarify their image and positioning.

focus on access and a secondary emphasis


on product. There is no doubt that this
sharply focused strategy has been an important element in the companys success.
What Does This Mean for Business?

This European study offers a broad and


deep view of what consumers are looking
for from their retail experiences and provides lessons that should lead businesses
to rethink their strategic imperatives in
order to increase their relevancy in the
marketplace. While our research focused
on consumers relationships with retailers,
the findings apply equally to almost any
type of business, from consumer products
companies to financial services firms. Most
importantly, the findings provide a view
through the consumers eyes and that,
when all is said and done, is the view that
really counts. Companies that develop a
truly consumer-centric strategy and align
their business processes and information
technology with this strategic framework
have the ability to drive growth and profitability, strengthen their competitive position by building a value proposition that is
meaningful to consumers, and take advantage of the white-space opportunity that
exists in the retail business today but
which almost certainly wont last forever.

The Value of Values


What are the most important values
to you as an individual?
(i.e., which personal qualities
do you value the most?)
% saying

Honesty

55%
Respect

18%
Reliability

11%
Friendly

11%
Courteous/Polite/Kind

9%

Focus on the Consumer

Its clear that consumers have changed,


and they are looking for something different from their goods and services
providers today. Understanding their
evolving needs, lifestyles and aspirations
is the underlying key to success for any
retailer. A clearly focused strategy centred
around a primary and secondary attribute
rather than a misguided attempt to excel
in all five areas allows a company to
meet those needs and desires in the most
effective and efficient manner possible.
Take the example of French supermarket
giant Carrefour, which was among a small
number of retailers in the countries studied whose value proposition was clear in
the minds of consumers, with a primary

Businesses, like people, also have values.


What values do you look for in the
companies with which you do business?
Honesty

% saying

36%
Respect

18%
Reliability

15%
Good Service

9%
Trust

9%
Consumers today are looking for more from their
commercial transactions than simply the product
or service itself. They are looking for values such
as honesty, respect and trust to be reflected in the
context surrounding those transactions.

Consumer Relevancy:
A New Model to Drive Strategy and Growth
Business viability hinges on understanding the new language of consumers.
Two countries separated by a common language. George Bernard Shaw/Winston Churchill (referring to England and the United States)

Our consumer research conducted in both


Europe and the United States makes it
clear that businesses and consumers today
are speaking two very different languages.
The new model for Consumer Relevancy
helps companies identify and close this gap.
A number of key pillars form the foundation of Consumer Relevancy:
All commercial transactions can be broken
down to five attributes price, product,
service, access and experience. While these
attributes have remained constant over
time, the specific meaning associated
with them in the minds of consumers
has changed radically.
Consumers are speaking a new language
one that most businesses have not learned.
Few companies understand that the
new language of consumers is rooted
in human values. And this language
transcends country borders; it was
common to all nationalities studied.
Consumer Relevancy provides the lens
through which to understand this shift and
develop specific approaches to succeed in the
new environment. Companies that practice Consumer Relevancy emphasise the
context surrounding their offering (the
way in which they deliver the product
or service) as much as the content of the
offering (the product or service itself).
The changing landscape has resulted in a
white-space opportunity missed by most
companies. Consumer Relevancy provides
a new avenue for a business to enhance
its competitive positioning by building a
value proposition that is truly different
and meaningful to consumers.
As we began to understand this new
language, a question arose: What caused
the gap that had developed between
consumers expectations and the offerings
being delivered by businesses? Our
research uncovered three key trends:
1. Societal devolution. Historically, people
have found reinforcement of their personal values in family, government, their
marriages, school, social-club membership, church. But today, our trust in
government has been slowly eroding;
organised religion has lost its monopoly
on the moral high ground; and the
quality of education has slipped. The

upshot is that traditional institutions


have become less able to adequately
reflect human values. As a result, consumers will respond to and reward
commercial institutions that offer
reinforcement of their personal values.
2. Increased inability to keep pace with daily
life. Most of the consumers we talked
with complained of the time pressure
and stress under which they lived.
3. Proliferation of increasingly intrusive information and communication technologies.
While technology has introduced many
positive changes, it has also brought
with it a sense of information overload.
These three converging megatrends, coupled with other critical concerns in Europe
such as food safety and anti-globalisation,
have created a world in which consumers
crave clarity, ease, certainty and trust.
Herein lies the opportunity for businesses
to change the commercial game for the
mutual benefit of their customers and
themselves.
Consumer Relevancy helps companies
understand the new language of consumers
and drive growth through a focused strategy. Essential to the Consumer Relevancy
model is the numerical value assigned to

each of the five attributes. These values


represent a companys allocation of
resources and operational efforts to achieve
either a threshold level of acceptance at
which it seeks to meet market competition
on an attribute (a score of 3); a level of
differentiation where the company uses an
attribute to persuade consumers to prefer
its products or services (4); or a level of
market dominance where the consumer
actively seeks out the company (5). A perfect score is 5, 4, 3, 3, 3, representing dominance on one attribute, differentiation on
a second and parity on the remaining three.
But a strategy alone is not enough. To
operationalise Consumer Relevancy, a
company must infuse its entire business
model with the focus and philosophy of
its chosen strategic framework. We call
this Customer-Driven TransformationSM,
a process that focuses, prioritises and
aligns operational improvements and IT
investments to drive business results. (For
more, see Customer-Driven Transformation:
Operationalising Consumer Relevancy,
available for download on www.cgey.com.)
In the sections that follow, we provide
a detailed analysis of how the principles
of Consumer Relevancy play out across
Europe overall and in each of the nine
countries.

A New Business Model: The Consumer Relevancy Framework


Attributes
Access

Experience

Price

Product

Service

If a business
dominates
on this
attribute, it ...

Provides a
solution

Provides
individual
intimacy

Is the pricing
authority

Generates
inspiration for
customers

Provides
customisation
of products and
services

... and
customers
seek the
business

If a business
differentiates
itself on this
attribute, it ...

Provides
convenience

Engenders care
for the customer

Is consistent in
its pricing

Generates
reliability for
customers

Provides
education for
customers

... and
customers
prefer the
business

If a business
operates at
industry par on
this attribute, it ...

Provides
ease

Engenders
respect for the
customer

Is honest in its
pricing

Generates
credibility
with customers

Provides for
accommodation
of customers
needs

... and
customers
accept the
business

Consumer Relevancy is based on a three-level model for each of the five attributes. At the basic threshold level of
competing on access, for example, consumers are saying, Make it easy for me to find what I need, and to get in
and out of your store in a hurry. At the second level, consumers are telling businesses to make the experience
convenient for them. And at the highest level, in which they actively seek a company, consumers are looking for
businesses to provide solutions to their lifestyle problems. How do you apply Consumer Relevancy? First, ask
yourself whether your business is currently operating at industry par in all five of the attribute areas based on the
framework shown here. If the answer is no, you must first lift those attributes to a level that meets the marketplace.
Then its time to consider on which attribute to dominate and on which to differentiate. If you arent sure, ask your
customers. Theyll be happy to tell you.
7

European Overview:
How Consumer Relevancy Plays Out Across Europe
From Finland to Italy, European consumers are searching for honesty, consistency
and fairness in their shopping experiences. And most are hard-pressed to identify
clear points of differentiation among various retailers.

How does Consumer Relevancy play out


in this changing environment that characterises much of Europe today? In fact,
similar patterns emerged from our research
in the nine European countries as had
in our earlier study in the United States.
European consumers demonstrated a clear
preference for values such as honesty and
respect when it comes to commercial
transactions. The importance of factors
like honest prices, consistently good product quality and courteous and respectful
employees came through strongly in both
the quantitative and qualitative research.
When asked how important certain items
were to their satisfaction when shopping,
consumers in Europe identified the same
top five factors as their counterparts in

I think that honesty


is a prerequisite for a
long-term relationship
with customers.
I always look for
this value.
82

the U.S., with a slight difference in rank


order. Almost three-quarters of European
consumers put The store is clean and well
maintained at the top of their wish list.
And more than two-thirds identified
courteous and respectful employees and
consistently good merchandise quality
as extremely important to their shopping
experience. At the bottom of the list were
factors such as being able to buy from
the retailer over the Internet or through
catalogues or mail order. Interestingly,
there was very little variance in the top
and bottom factors among the different
European countries.
When consumers were asked which values
were most important to them as individuals, 55 percent said honesty, followed by
respect, which was cited by 18 percent
of respondents. Similarly, when asked
about the values that they look for in the
companies with which they do business,
consumers again pointed to honesty first,
followed by respect and reliability. It

should come as no surprise that honesty


ranked highest, since it can be viewed as a
precursor to all other values table stakes
in the game of retail, if you will. I think
that honesty is a prerequisite for a longterm relationship with customers, noted
one Italian consumer. I always look for
this value. The lesson for companies is
clear: If you are doing anything that would
ever call into question your honesty, you
run the risk of losing consumers trust and
their business.
That lesson is not lost on some European
retailers. Honesty and fairness are the
most important values for us, said Maura
Latini, sales and communications manager
for Ipercoop, an Italian hypermarket chain
operated by Coop Italia. We believe in
these values and we communicate them
in all external marketing and promotional
sheets. Francesco Pinelli, chief of the
supermarket channel at Coop Italia, noted
that Coop is focused on the consumer.
We want to treat each customer like an

Consumer Relevancy: A European View


Primary Attribute
Attribute

Secondary Attribute

Many European countries today are


marked by significant change as issues
such as economic uncertainty, food safety
concerns, the anti-global movement,
increased time pressure and stress, and
information overload impact consumers
lives to an ever greater degree. These
trends have not gone unnoticed by some
retailers such as Statoil. The company has
tapped into one of the megatrends that is
shaping buying behaviour and consumers
retail relationships, as they increasingly
look for businesses to provide clarity, ease,
certainty and trust. Increased stress is a
key trend that we try to cater to, said
Mats Holgerson, president of Statoil
Detaljhandel Skandinavia, which operates
1,500 gas and convenience store outlets
in Sweden, Norway and Denmark. Our
mission is to make everyday life easier for
our customers.

Price

Service

Product

Experience

Access

Price

Yves Rocher, B&Q,


Next, Dcathlon,
Boots

Intermarch,
Aldeasa

Service

Sephora, Galeries
Lafayette, El Corte
Ingls, Marks &
Spencer (food), FNAC,
Gruppo Lombardini

Statoil
Detaljhandel

Product

Aldi, Lidl,
Deichmann/Roland,
Leader Price,
Prisma, H&M

Superquinn

Rema 1000, C&A

K-rauta

Albert Heijn

Real, Carrefour,
Coop (Italy),
Casino,
Divani & Divani

Experience

Access

hlns, Hema

European retailers highlighted in red are profiled in case studies throughout the report. Their positioning on this
matrix indicates the primary and secondary attributes on which their management teams have built their strategic
framework. In addition, consumers in the nine European countries studied were asked to identify the primary
and secondary reasons that they shop at their favourite stores across key retail channels. The retailers highlighted
in black were among those that consumers identified as being particularly well differentiated in terms of the
Consumer Relevancy model. (Note: Carrefour, Marks & Spencer and Coop Norge are also featured in case studies,
and Superquinn was profiled in The Myth of Excellence, the best-selling business book that introduces Consumer
Relevancy; for more information, see page 39 of this report.)

What Consumers Really Want


individual and inspire in him a sense of
our absolute fairness and honesty when he
buys in our stores and especially when
he buys the products branded as Coop.
Close-up on Consumers
An examination of the five attributes of
price, product, service, access and experience provides a clearer picture of the factors
that matter most to European shoppers
(see chart, What Consumers Really Want).
Price: In the case of price, honest price
was clearly the most important factor
and far outweighed lowest price. In
fact, the spread between the number
of consumers citing honest price as
extremely important and those naming
lowest price was a full 20 percentage
points. Concerns about honest and
consistent pricing were echoed in our
face-to-face interviews. Said one shopper
in Milan: Sometimes I have the sensation that prices tend to fluctuate and I
dont understand why. A similar sentiment was expressed by a young woman
from Sweden: I like sales in general,
but when they always have sales I start
wondering. If they can afford to have
constant sales, why cant they put that
money into lowering their regular price
levels. I feel a bit cheated.
Product: As in the U.S., more European
shoppers cited consistently good merchandise quality as extremely important
rather than top-quality products, again
with nearly a 20-point differential. In the
follow-up consumer interviews, factors
such as trust and reliability were deemed
critical when it came to product. Said
a shopper in France commenting on
health and beauty retailer Yves Rocher,
I like their products because they are
natural. I trust the brand.
Service: The importance of following
through on the basics of customer service was apparent in both the quantitative and qualitative research and mattered far more than did value-added
services. Return policies, for instance,
matter to European consumers much the
same way they do in the United States.
The ability to unconditionally return
merchandise ranked as the leading service-related factor in Europe and in the
U.S. The importance of easy returns also
came through in our conversations with
consumers. At Aldi it is possible to
return non-food products in Berlin
even if you bought them in Hamburg,
pointed out one German consumer.

Europe Top Responses

% saying
extremely
important

United States Top Responses

% saying
extremely
important

PRICE

PRICE

1. You feel you are getting an honest price, that 58%


the price has not been artificially increased

1. You feel you are getting an honest price, that 64%


the price has not been artificially increased

2. Prices do not fluctuate from day to day

54%

2. During sales, you save significant money


on your purchases

57%

3. You feel you are getting the lowest


price available

38%
3. The retailer offers leading brands at
lower prices

54%

3. You feel you are getting the lowest


price available

54%

PRODUCT

PRODUCT
1. The retailer provides consistently good
merchandise quality

67%

1. The retailer provides consistently good


merchandise quality

70%

2. The retailer carries a wide assortment of


products, so you can find exactly what you
are looking for

50%

2. The retailer offers top-quality products


throughout the store

59%

48%

3. The retailer carries a wide assortment


of products, so you can find exactly what
you are looking for

58%

3. The retailer offers top-quality products


throughout the store

SERVICE

SERVICE
1. You can unconditionally return merchandise
with which you are unhappy

60%

1. You can unconditionally return merchandise


with which you are unhappy

69%

2. Employees can answer most of your


questions about their products

57%

2. Returning merchandise is quick and


hassle free

65%

3. Returning merchandise is quick and


hassle free

56%

3. The staff effectively bags/packages


your items so they are not damaged

64%

ACCESS

ACCESS

1. The store is clean and well maintained

71%

1. The store is clean and well maintained

69%

2. The price is easily visible, the price is


well marked

64%

2. The price is easily visible, the price is well


marked

68%

3. The retailer provides excellent handicap


access inside the store (that is, ramps,
electric carts for handicapped)

57%

3. The store has convenient hours, i.e.,


youre able to shop when you want

60%

EXPERIENCE

EXPERIENCE
1. Employees are courteous and respectful

69%

1. Employees are courteous and respectful

73%

2. Staff responds to concerns in a


positive manner

54%

2. You are treated as a valued customer

66%

51%

3. Staff responds to concerns in a


positive manner

61%

3. You are treated as a valued customer

The importance of factors such as honesty, consistency and respect was apparent in consumer responses to
statements regarding their shopping experiences. The results of the European research mirror to a large degree
comparable research conducted among thousands of consumers in the U.S. over the past three years.

I like sales in general, but when they always have sales I start wondering.
If they can afford to have constant sales, why cant they put that money
into lowering their regular price levels. I feel a bit cheated.

Access: When it comes to access,


European consumers made it clear that
what goes on inside the store was what
really counted. A clean and well-maintained store was the leading access-oriented factor, as well as the number one
factor overall. It was named as extremely
important by 71 percent of consumers,
compared with just 34 percent who
cited convenient location. In the face-toface interviews, consumers pointed out
that cleanliness was particularly critical
for food retailers. The shop is clean,
which is important for fresh products,
said one shopper in France referring to
Carrefour.
Experience: Similar to their U.S. counterparts, European consumers recognise
the difference between being entertained
and being treated in a respectful and
courteous manner so that they feel good
about themselves and their shopping
experience. The shops should not try to
entertain the customer, said a shopper
from Germany. Its enough that the store
is nice and cosy and that you feel comfortable there.
Data Points to Lack of Differentiation
One of the most startling and disturbing
findings was the fact that a substantial
number of consumers could not identify
a favourite store in many retail channels.
For example, 41 percent of consumers
in Spain and 33 percent of Norwegian
respondents could not name a favourite
supermarket. There were, of course,
exceptions. In Germany, Aldi was named
as the favourite discounter by 32 percent
of respondents, and in the UK, 36 percent
of consumers named Boots as their
favourite health and beauty store.
Whats more, retailers in general were not
well differentiated in the minds of consumers based on the Consumer Relevancy
model. In most cases, there was little
unanimity among consumers when they
were asked to identify the primary and
secondary reasons that they shopped at
a particular store. These results point to
a lack of enterprise focus and a failure
on the part of the retailers to promote a
clearly defined image in the marketplace.
A notable exception was France, where
there tended to be much greater agreement among consumers about the primary
and secondary reasons for shopping in

10

Internet Shopping Patterns in Europe


Do you use the Internet for shopping?

Yes

17%

16%

83%

84%

No

8%
92%

No, but use the Internet for "window shopping"

21%

7%
93%

18%

26%

8%
92%

82%

79%

73%

28%

28%

Europe
Total

23%

22%

Finland

22%

78%

74%

18%

27%

14%

14%

France

Germany

16%

14%
Italy

Netherlands

Norway

Spain

13%
Sweden

Net Returns: Online Shopping Remains Low


Now that the cyberdust has settled, its possible to get a clearer picture of
the state of online shopping in Europe and its not particularly encouraging.
Just 7 percent of European respondents said it was extremely important to
be able to buy from the retailer over the Internet. In fact, this item ranked last
among all 51 factors about which consumers were surveyed. Overall, only
17 percent of European respondents indicated that they use the Internet for
shopping. The highest Net shopping rates occurred in Sweden and Norway,
where about one-quarter of consumers in each country said they shop online.
In contrast, the lowest rates were recorded in France, Spain and Italy.
Some differences were apparent depending on factors such as age and gender. For instance, more men than women reported that they have used the
Internet for shopping. Similarly, the online buying rates were higher for the
younger age groups than for the older cohorts, with the highest rate (28
percent) recorded in the 25-34 age group. These findings call to mind the
early days of online retailing in the United States, which was also dominated
largely by men and younger age groups. However, as B2C e-commerce sales
have grown in the U.S., the online population has become more reflective
of brick-and-mortar shoppers in terms of gender, age and income levels.
There were no great surprises in terms of the products purchased online.
Books and music led the list, followed by electronic products, clothing,
computers, tickets/reservations, videos/films, food/drink and toys. At the
bottom of the list were categories such as financial services, health and
beauty products, cosmetics, flowers and fragrances. A few variations from
the norm were apparent. For example, food and drink products were purchased online by 18 percent of consumers in the UK, compared with just
8 percent for Europe overall.

UK

The shops should not try to entertain the customer. Its enough that the store is
nice and cosy and that you feel comfortable there.

many though not all retail stores. In


addition, a handful of individual operators
stood out as being strongly differentiated.

The channel owes its strength largely to


the success of Aldi, which is clearly the
dominant discounter in Germany.

The good news is that there appear to


be clear opportunities for stores to better
define and focus their go-to-market strategy and build consumer mindshare as well
as market share. Some of the executives
we interviewed recognise the importance
of focusing on key attributes. Indeed,
focus is one of our key strengths. You
cannot do everything, said Holgerson of
Statoil Detaljhandel Skandinavia. Our
concept does not allow us to compete on
price, so it would be a waste to focus on
that. Still, we want to maintain fair prices,
provide the basic products needed and
create a nice atmosphere. But our primary
focus area is access, complemented with a
good service level.

The strength of Aldi and other discounters


in Germany helps explain some of the difficulties experienced by Wal-Mart in that
country. While the giant mass merchant
has posted consistently strong comparablestore sales gains in the U.S., it has struggled in Germany. The impact of Wal-Mart
has not been as far-reaching as some had
predicted, according to the European
Retail Handbook 2001/02. It is taking
the company some time to learn how
different the German retail environment is
to that in the USA. Wal-Marts experience
in Germany demonstrates just how important it is that multinational retailers truly
understand the differences that exist
market to market.

Where Countries Differ


While theres no denying that there was
much unanimity among consumers in all
nine countries about the factors that matter most in the shopping experience, there
were differences that emerged as well. For
example, consumers in some countries,
particularly Spain, were more inclined to
rate the factors related to shopping satisfaction as extremely important, while
those in Finland and Germany were less
likely to do so.

The strength of the supermarket channel


was more pronounced in some countries
than in others. In Sweden, for example,
supermarket shopping frequency is particularly high, with more than two-thirds of
respondents indicating that they shop at
a supermarket several times a week,
compared with the European total of
42 percent. In addition, most Swedish
consumers could point to a favourite
supermarket, with ICA topping the list,
followed by Konsum and Hemkp. In
the Netherlands, Albert Heijn dominates
the market, with almost one-third of
respondents naming the retailer as their
favourite supermarket.

In addition, the strengths and weaknesses


of different retail channels within the
countries were evidenced in the data.
Consider the discount channel in
Germany. Half of the German respondents
said they shop at a discount store at least
once a week, compared with just 28
percent of European consumers overall.

In the hypermarket channel, which is a


significant factor in France, Spain and
Italy, consumers demonstrated clear store
preferences. In France, where 91 percent

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At a Glance: Consumer Sensitivity to Retail Attributes by Country

Access
Experience
Price
Product
Service
High Sensitivity

Low Sensitivity

While theres no denying that there was much unanimity among consumers in all nine European countries about
the factors that matter most in the shopping experience, there were differences that emerged as well. For example,
shoppers in France tended not to rate the factors related to service as highly as did consumers in a number of
other countries, while those in Norway and the UK displayed lower sensitivity to factors related to access.

of respondents said they shop in a hypermarket at least once a week, Carrefour led
the list of favourites, followed by Auchan,
Leclerc and Intermarch. In Spain, almost
two-thirds of consumers shop at hypermarkets at least once a week, and again
Carrefour was at the top of the list of
favourites, followed by Hipercor, Alcampo,
Eroski and Mercadona. In Italy, the frequency of shopping is a little lower, with
45 percent of consumers saying they shop
at hypermarkets at least once a week.
Among those named as favourites were
Ipercoop, Auchan and Carrefour.
The results for the department store channel were mixed, with consumers in some
countries identifying clear favourites,
while shoppers in others were less definitive. In the Netherlands, 41 percent of
respondents pointed to V&D as their
favourite department store; in Spain,
El Corte Ingls was named by 39 percent
of consumers; in Finland, 29 percent
named Stockmann; and in France, 20
percent identified Galeries Lafayette.
However, in countries such as Norway
and Italy there were no clear favourites
in the department store channel.
In channels such as clothing/shoes/accessories, health and beauty, and speciality
stores, shopping frequency was generally
fairly low and there were only a handful
of retailers that stood out. As mentioned
previously, Boots was named by 36 percent of consumers in the UK as their
favourite health and beauty store. Next,
a UK clothing chain, was identified as the
favourite store in the clothing/shoes/accessories channel by 11 percent of UK
respondents, the highest of any retailer in
this sector in any of the countries. In the
Netherlands, while shopping frequency
was low for the health and beauty channel
(74 percent of consumers said they shop
less than once a month vs. 43 percent for
Europe overall), respondents did have
strong store preferences, with DA Chemist
and Kruidvat leading the list of favourite
health and beauty stores, followed by
Aholds Etos chain.
While this topline review provides an
overall picture of the European retail business as seen through the eyes of consumers,
the sections that follow offer more indepth analysis of shopping behaviour and
preferences in each of the nine countries.
Also included are case studies of a number
of retailers that provide a view of what
Consumer Relevancy looks like in practice.
11

Finland: Store Preferences Stand Out


In Finlands highly concentrated retail environment, consumers display strong
store preferences but little certainty about retailers differentiating characteristics.
Ask Finnish consumers to name their favourite supermarket and chances are they will
quickly supply an answer. Unlike some of their European neighbours, consumers in
Finland display a high degree of store preference in many retail channels. This was particularly true for supermarkets and department stores, where the highest-ranking retailers
each garnered a significant number of mentions.
This may be due, at least in part, to the high degree of concentration that exists in
the Finnish retail market, where four major players (Kesko/K-group, SOK/S-group,
Tradeka/Elanto and Spar) dominate the business across a number of channels. In food
retailing, for example, Kesko and SOK own two-thirds of the market with numerous
store brands, according to the European Retail Handbook 2001/02. Prisma, operated by
the S-group, led the list of favourite supermarkets, named by 20 percent of consumers;
followed by Kesko/K-groups Citymarket, cited by 19 percent; Kesko/K-groups other
supermarkets with 16 percent of mentions; and S-Market, another S-group brand, with
12 percent.
In the department store channel, shopping frequency was quite high in Finland, with
about one-third of consumers shopping at them at least once a week, above the
European average of about 17 percent. This may account for the strong store preferences
demonstrated in the department store channel, with Stockmann named as the favourite
by 29 percent of respondents, S-groups Sokos by 15 percent and Kesko/K-groups Anttila
by 14 percent. Even in the speciality store channel, response rates concerning favourite

Respondents in Finland
placed the greatest
emphasis on factors
related to both access
and experience.

What Consumers in Finland Want


Europe Top 5 Responses

% saying
extremely
important

Finland Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

Employees are courteous and respectful

67%

Employees are courteous and respectful

69%

The store is clean and well maintained

66%

The retailer provides consistently good


merchandise quality

67%

The price is easily visible, the price is


well marked

62%

The price is easily visible, the price is


well marked

64%

The retailer provides consistently good


merchandise quality

60%

You can unconditionally return merchandise


with which you are unhappy

60%

Employees can answer most of your


questions about their products

59%

And Dont Want From Their Shopping Experiences


Europe Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

You receive phone calls or mail informing


you of sales or special events

13%

The store plays music or videos that


enhance the shopping experience
You can buy from the retailer through
catalogues or mail order
You can buy from the retailer over the Internet
12

Finland Bottom 5 Responses

% saying
extremely
important

The retailer carries unique or unusual


products that are difficult to find elsewhere

10%

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

4%

12%

You can buy from the retailer through


catalogues or mail order

3%

10%

You can buy from the retailer over the Internet

2%

The store plays music or videos that


enhance the shopping experience

2%

7%

stores were relatively high in Finland, with 7 percent of consumers naming Kesko/Kgroups K-rauta as their favourite and 5 percent citing Kesport/Intersport, also operated
by Kesko/K-group. In most of the European countries, store preference rates in this channel were lower, primarily due to the fact that the speciality channel covers a variety of
sectors, including books, sporting goods, electronics, toys and do-it-yourself (DIY). As a
result, responses tended to be quite dispersed among a wide array of retailers.
The situation is somewhat different in the discount channel and health and beauty
channel. The discount channel is not well developed in Finland, with lower-than-average
shopping frequency. However, analysts point out that the discount channel is worth
watching, as German-based Lidl moves into the Finnish market. The discounter opened
two new stores near Helsinki and announced plans to open 100 units in Finland over
the next three to four years.
Similarly, in the health and beauty channel, shopping frequency is particularly low in
Finland, with just 2 percent of respondents indicating that they shop at a health and
beauty store at least once a week, compared with the European average of 12 percent.
In addition, 86 percent of consumers in Finland could not name a favourite retailer in
the health and beauty channel.
Although consumers in Finland were generally quite clear about their retail choices in
some channels, they were not as definitive when it came to their reasons for shopping
at those stores. In most instances, retailers were not well differentiated in consumers
minds, with wide disparity among responses. For instance, a substantial number of
respondents pointed to access as their primary reason for shopping at Citymarket, yet
nearly as many identified product. And their responses regarding the secondary reason
were spread among price, product and access. Likewise, in the case of K-Supermarkets,
responses regarding the primary reason for shopping were spread nearly evenly among
price, product, experience and access, with the responses relating to the secondary reason dispersed among all five attributes.
Finnish Consumers Focus on Access and Experience

So what do Finnish consumers look for in their shopping experiences? Price appeared to
be the least important of the five attributes to consumers in Finland. The leading pricerelated factor prices do not fluctuate from day to day was ranked as extremely
important by just 33 percent of respondents. In contrast, the highest-ranking factor in
the other four attribute groups was deemed extremely important by about 60 percent
of consumers. Among the price factors, however, there was still considerably more
emphasis placed on honest prices than on lowest prices. Just 18 percent of consumers
said that getting the lowest price available was extremely important vs. one-third who
placed significant importance on honest price.
Respondents in Finland placed the greatest emphasis on factors related to access and
experience. The values-oriented factors were especially important in terms of experience,
with two-thirds of consumers citing courteous and respectful employees, 53 percent saying you are treated as a valued customer and nearly half pointing to staff responds to
concerns in a positive manner.
Compared with many of the other European countries, a lower percentage of respondents in Finland answered extremely important when asked about the 51 factors
relating to their shopping satisfaction, which might suggest that consumers in Finland
are somewhat less demanding. Nevertheless, their ranking of factors was quite consistent
with the rest of the European countries studied, with courteous and respectful employees, clean and well-maintained stores and easily visible prices leading the list.
The youngest consumers (15-24) tended to be the least demanding, with a smaller
percentage rating factors as extremely important, compared with other age groups in
Finland. Yet even among the younger shoppers, values-oriented factors such as courteous
and knowledgeable employees mattered the most. This was also true in Sweden, providing an interesting insight in how to serve young consumers in those countries.

Case Study
Prisma: Providing Value for the Money
In recent years, the retail market in
Finland has increasingly shifted toward
chains and shopping centres located
outside cities. These centres house
a variety of retailers and are often
anchored by a large supermarket that
drives customer traffic. Prisma is among
the stores that frequently plays the role
of shopping centre anchor. Prisma
belongs to the S-group and operates
more than 40 large supermarkets/hypermarkets with a market share of about 10
percent, according to retail analysts.
Prisma has built its strength on two key
features: dominating on price by offering
low, fair and consistent prices; and differentiating on product by providing a wide
selection of consistently good-quality
items. A variety of initiatives helps the
company maintain its price dominance.
S-group has restructured its procurement
and logistics procedures through
technology advances that allow for a
decentralised, more streamlined structure that requires less capital investment.
Cost efficiencies have also been realised
through greater cooperation with suppliers to help reduce the number of
touchpoints in the handling and delivery
process, particularly for produce items.
Company executives note that while
these features may not be visible to
consumers, they help Prisma maintain
its consistent pricing levels. They emphasise that rational buying is the retailers
guiding principle.
In addition, Prismas advertising and
marketing efforts are limited, helping to
further control costs. Finally, S-group
has introduced its S-Benefit Card, a
loyalty programme that allows customers
to gain bonus points by shopping at any
of the groups different stores, helping
to broaden the retailers price-dominant
value proposition.
Prismas differentiating strategy focuses
on the product attribute and is supported
by the companys reputation for carrying
good quality, reliable brands. In addition,
the retailer has broadened and diversified
its product mix to reflect consumers
changing tastes, which have become
more varied and global in nature. S-group
also works closely with suppliers, particularly in the perishables category, to
develop innovative packaging that has
allowed the company to improve both the
breadth and quality of its product offering.

13

Store Preferences in Finland:


The Consumers View

Case Study

Company

K-rauta: Thriving in the Changing DIY/Hardware Market

Supermarkets

Few retail channels in Finland have undergone as great a change in recent years as
hardware/DIY stores. Due to consumer trends such as womens expanded decisionmaking role in hardware-related purchases, families as customers and the increase
in DIY shoppers, retailers in the DIY space have transformed themselves into large
one-stop-shopping stores providing a wide range of products and services for the
home. Leading the market is K-rauta, operated by Kesko/K-group. A key challenge
for K-rauta has been the need to balance the demands of its disparate customer
base, which includes construction businesses, homeowners embarked on renovation
projects, interior decorators, do-it-yourselfers and home-improvement enthusiasts.
To meet this challenge, K-rauta has opted to pursue a strategy of dominating on
service and differentiating on access. The companys service focus hinges on several
factors: offering customised solutions, advice, ideas and inspiration; obtaining and
organising installation services for customers; strong training programmes that are
tailored to the different departments and different types of customer groups to be
served; and highly skilled specialists in areas such as house construction and kitchen
and bathroom renovations.
The companys differentiation on access is critical in a channel that covers a wide
range of products and attracts diverse customer groups. K-rautas secondary emphasis on access is reflected in a number of features inside the stores that are designed
to make shopping easier:
The units are divided into two distinct sections the soft side, which contains
interior decoration items such as wallpaper, paint, ceramic tiles and floor coverings, and the hard side, consisting of construction products, hardware items,
tools and building materials.
In-store signs are clear and properly located, helping consumers find what they
need quickly and easily.
Purpose-built displays such as unrolled wallpaper shown in the correct lighting,
finished tiling exhibits and a trial bench for electric tools are designed to make it
easier for customers to locate the right products for the job.
Store settings have been designed around kitchens, bathrooms, saunas, entrance
halls, etc., so shoppers can find the products they need.
A cash-and-carry system allows customers to load goods directly from the stores
warehouse and pay in the cash-and-carry yard after loading.
In-store service locations are positioned in areas where there are products that a
customer is likely to need advice about.
Company executives note that this service/access strategic framework has helped
K-rauta achieve success in the changing hardware/DIY market.

Prisma
Citymarket
K-Supermarket
S-Market
No favourite/no answer

% saying
favourite store

20%
19%
16%
12%
15%

Discount Stores
Halpahalli
Vapaavalinta
Honkong
Tarjoustalo
No favourite/no answer

9%
6%
5%
4%
44%

Department Stores
Stockmann
Sokos
Anttila
Citymarket
Prisma
No favourite/no answer

29%
15%
14%
3%
3%
28%

Clothing/Shoes/Accessories
K-Kenk
Stockmann
Seppl
No favourite/no answer

8%
6%
4%
44%

Health and Beauty


Yves Rocher
Body Shop
No favourite/no answer

3%
2%
86%

Speciality Stores
K-rauta
Kesport/Intersport
No favourite/no answer

7%
5%
52%

Note: In an open-ended question, consumers were


asked to name their favourite store in each channel.
Responses are for the country as a whole. As a result,
strong regional retailers may not appear on the list.
Totals for each channel do not equal 100% because
only the top responses, as well as the percent saying
no favourite or no answer are included.
Unlike some of their European neighbours, consumers
in Finland display a high degree of preference in some
retail channels. This was particularly true for supermarkets and department stores, where the highest-ranking
retailers each garnered a significant number of mentions.
However, in most instances, the retailers were not well
differentiated, with wide disparity among consumers
responses about why they shopped at a particular store.

14

France: Shoppers See Well-Defined Value Propositions


Unlike many other Europeans, French consumers were quite definitive about
their favourite retailers and could clearly identify the reasons they shopped
at those stores.
When it comes to retail differentiation,
France seems to be the exception that
proves the rule. While our research
indicates that retailers in most of the
European countries we studied have not
done a particularly good job of promoting
a well-defined image and positioning
among consumers, that is not the case in
France. French consumers demonstrated
much more agreement about the primary
and secondary reasons why they shopped
in their favourite stores than did shoppers
in other countries.
In the case of health and beauty retailer
Yves Rocher, for example, consumers
clearly pointed to product and price. The
companys own-brand natural cosmetic
products were viewed as trustworthy by
shoppers, and the prices were deemed to
be fair and honest. The prices are reasonable and they always give you small gifts,
said one Yves Rocher shopper.
French retailers recognise the importance
of establishing a well-defined value proposition. We do believe that focusing differentiation on some attributes is the only
way to be successful, said Jean-Louis
Baillot, managing director, French stores,
for IKEA. M. Baillot also pointed to the
importance of context and values such as
respect and honesty in the retail business.
For instance, he noted that it is often the
good price rather than the lowest price

that is more important in the marketplace.


Even a discount leader such as IKEA
tends to develop more of a partnership
relationship with their customers by offering the right value proposition with a fair
price, he said, adding that very often
content is a given, and increasingly context represents a key driver for the customers choice. And this is even more
significant in the furniture business.
French supermarket operator Systme U
also understands the importance of market
differentiation. The company, whose market share has been growing strongly over
the past three years, focuses on experience
as its primary attribute and product as its
secondary attribute. Regarding experience,
Michel Gallo, director general, noted that
Our policy for 10 years has been to place
the customer at the centre of all our business activities and to establish a unique
proximity relationship with him, covering
all sales and relationship aspects. He
pointed out that the company is introducing a national training programme
designed for employees and associates that
will focus on developing and reinforcing
the companys practices in terms of client
welcome and service.
On the product attribute, said Gallo, The
quality of our sales context (how to sell),
our private labels, and the choice and freedom we propose are considered to be a

real difference, according to our clients. A


training programme aimed at employees is
being implemented that will improve and
consolidate their knowledge of products
and categories so they are in a good position to advise the consumers on their purchases, the way a good merchant should.
An important aspect of Systme Us strategy, said Gallo, is the emphasis on human
values and context. We understood this
very early and have applied it over the last
decade, he said. Moreover, it is part of
our day-to-day practice and core business.
Trust and consistency are the two values
that characterise us and that we want to
convey to our customers.
The need for clear differentiation and a
focused strategy is important to packaged
goods manufacturers as well. Perrier Vittel
France, for instance, has identified access
as its primary attribute and service as its
secondary focus, noted CEO Alain
Dorfner. Perrier Vittel is selling water,
he said. Water is a very simple natural
product, so the buying process has to be
very simple too. As a consequence for
Perrier Vittel, the key business driver is
to provide to the customers easy access to
the products. That strategy applies even
more to alternative outlets like restaurants
and sports retailers than to retail channels
such as supermarkets and hypermarkets.
For example, the company has an agreement with Go Sport and Dcathlon, retail
sports chains, to offer Perrier Vittel products in its stores. The secondary attribute
of service is reflected in a variety of areas:
clear product information and education
provided to customers; easy return policies; and consumer information and
satisfaction policies measured by key
performance indicators connected to
brand values such as honesty, respect and
transparency.
Kronenbourg, a leader in the French beer
business, has built its strategy around
access and experience. Luc Canevet, sales
director, noted that access in this case
focuses on distribution availability of the
companys many sizes and flavours
through a wide range of outlets, including
supermarkets, cafs, restaurants, motels
and fast-food operators. To succeed at the
15

experience attribute, said Canevet, involves


ensuring product security and linking
items to a variety of consumption moments.
There will be a Kronenbourg brand and
products for each life consumption
moment, he said.
The French retail market in most channels
was also characterised by distinct store
preferences. In the supermarket sector,
Intermarch, Leclerc, Champion and
Systme U were among the favourite
stores; Carrefour, Auchan and Leclerc
dominated the hypermarket sector; the
list of favourites in the discount channel
was led by Lidl and Leader Price; Galeries
Lafayette and Printemps were the top
favourites among department stores; the
health and beauty channel was dominated
by Yves Rocher; and Dcathlon and FNAC
were the most frequently mentioned
speciality stores.
The only exception was the clothing/shoes/
accessories channel, where the favourites
were dispersed among a wide array of
retailers, which is not surprising given that
this sector in France is characterised by a
multitude of store banners. In contrast,
the department store channel is dominated
by just a few key players, most notably
Galeries Lafayette and Printemps. In our
face-to-face interviews, consumers frequently pointed to service as a strong attribute
of Galeries Lafayette. The saleswomen are
helpful and concerned with clients needs,
said one shopper. They seem to know
about their products, noted another.
Where Access Is All Important

Both the quantitative and qualitative


consumer research in France pointed to
the importance of access, particularly the
internal aspects. The factors related to
access tended to be rated more highly in
France in terms of their importance. For
instance, 81 percent of French respondents said it was extremely important that
the store be clean and well maintained,
compared with 71 percent of Europeans
overall; and 71 percent of French consumers deemed easily visible, well-marked
prices as extremely important vs. 64 percent
in Europe overall.
Interestingly, the access-oriented factors
tend to be of particular importance to
women in France, more so than they are
to men. For instance, easily visible prices
were cited as extremely important by 76
percent of female respondents in France,
compared with 64 percent of male respondents. And a clean and well-maintained
store was named by 87 percent of women
but 74 percent of men in France.
16

Case Study
Carrefour: Where Access and
Product Meet
At the junction of groceries, merchandise
and services, youll find French retail
giant Carrefour, which means crossroads in French. The worlds secondlargest retailer (behind Wal-Mart),
Carrefour operates more than 9,400
stores under some two dozen banners
in 30 countries in Europe, Latin America,
Asia and the United States (where it
owns almost 12 percent of the PetsMart
pet supply superstores). The companys
formats include Carrefour hypermarkets,
Champion supermarkets, Shopi and
March Plus convenience stores, Dia
and Ed discount stores, and Promocash
cash-and-carry stores.
The management of Carrefour understands the critical importance that values
play in business today. Beyond its
commercial operations, Carrefour puts
considerable emphasis on social and
environmental issues, including respecting the environment, guaranteeing food
safety, playing an active ethical and
social role, and fostering solidarity
around the world through education,
health and human rights. We firmly
believe that our responsible approach is
the source of our success, said Michle
Kerrad, marketing director DMMG
(Direction Marchandises et Marketing
Groupe), Carrefour.
Theres no doubt that a sharply focused
retail strategy also contributes to the
companys strength. Carrefour was
among a small number of retailers in
Europe whose value proposition was
well-defined in the minds of consumers,
with access as the primary attribute
and product as the secondary attribute.
Kerrad noted that external access in the
form of convenient location remains an
important element in the hypermarket

channel. However, the companys domination on access extends to the inside


of the stores, as Carrefour engages in an
ongoing process to optimise its internal
access. Tactics include a comprehensive
merchandising programme, high visibility
of new products and promotional items,
and easy navigation with precise targets
and measures in terms of navigation
cost-effectiveness and customer satisfaction.
Carrefours focus on product is reflected
in a number of areas:
The company was the first retailer in
France to launch its own-brand line
of products.
Carrefours extensive product assortment extends to many categories: The
company is Frances largest flower shop.
The retailer is attempting to democratise product categories such as microcomputing by bringing these items into
its stores.
Innovation and creativity are hallmarks
of Carrefours product selection. The
company capitalises on its international
reach to promote products coming
from various regions of the world.
The product focus also extends to developing more environmentally sensitive
items and guaranteeing the safety of
products through traceability, scrupulous
monitoring of the cold chain, guaranteeing a safety first principle through such
efforts as its non-GMO product line, and
a fast and effective product recall procedure that makes it possible to recall a
product from all the companys banners
in less than two hours.
On the remaining three attributes, the
company takes a back to the basics
approach, said Kerrad. For example,
in the area of experience, the company
ensures professional points of contact,
with an emphasis on context and values
such as respect, trust and honesty.

Making It Easy for Shoppers


The retailer provides excellent handicap access inside the store
(that is, ramps, electric carts for handicapped)
% saying extremely important

Northern Europe
Germany, Netherlands, UK

43%
51%
73%

Southern Europe
Total Europe
United States

57%
50%

French consumers and other Southern Europeans placed significant emphasis on handicap access in stores. This
may be due at least in part to the fact that the European population is aging considerably. The important thing for
retailers to keep in mind is that these older consumers are expected to be healthier and more fully engaged in life
than their predecessors, and, as such, represent a powerful buying group going forward.

Store Preferences in France:


The Consumers View

What French Consumers Want


Europe Top 5 Responses

% saying
extremely
important

France Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

The store is clean and well maintained

81%

Employees are courteous and respectful

69%

The retailer provides consistently good


merchandise quality

76%

The retailer provides consistently good


merchandise quality

67%
Employees are courteous and respectful

76%

The price is easily visible, the price is


well marked

64%

The price is easily visible, the price is


well marked

71%

You can unconditionally return merchandise


with which you are unhappy

60%

The retailer provides excellent handicap


access inside the store (that is, ramps,
electric carts for handicapped)

71%

And Dont Want From Their Shopping Experiences


Europe Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

% saying
favourite store

Supermarkets
Intermarch
Leclerc
Champion
ATAC
Casino
Systme U
No favourite/no answer

18%
14%
13%
5%
4%
4%
24%

Hypermarkets
Carrefour
Auchan
Leclerc
Intermarch
Casino
No favourite/no answer

29%
21%
16%
8%
5%
12%

Discount Stores

% saying
extremely
important

The store plays music or videos that


enhance the shopping experience

19%

You receive phone calls or mail informing


you of sales or special events

17%

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

15%

You can buy from the retailer through


catalogues or mail order

11%

Lidl
Leader Price
Ed
Aldi
No favourite/no answer

18%
10%
7%
5%
56%

Department Stores

You receive phone calls or mail informing


you of sales or special events

13%

The store plays music or videos that


enhance the shopping experience

12%

You can buy from the retailer through


catalogues or mail order

10%

You can buy from the retailer over the Internet

France Bottom 5 Responses

Company

7%

Galeries Lafayette
Printemps
C&A
No favourite/no answer

20%
10%
3%
52%

Clothing/Shoes/Accessories

You can buy from the retailer over the Internet

5%

La Halle aux Chaussures


Gemo
La Halle aux Vtements
Camaieu Femme
No favourite/no answer

5%
4%
3%
3%
46%

Health and Beauty


Yves Rocher
Sephora
No favourite/no answer

20%
7%
59%

Speciality Stores

Where Regional Differences Play a Role


In general, French consumers tended to line up fairly well with their Southern
European neighbours in Italy and Spain in terms of their responses, while
similarities were apparent among consumers in Northern Europe (Finland,
Norway and Sweden) and among those in the other countries (Germany, UK
and Netherlands). Southern Europeans were more likely to rank factors as
extremely important, compared with consumers in Northern Europe and the
other countries.
There were only a handful of instances where the regional pattern varied. For
example, being treated as a valued customer was rated as extremely important
by more consumers in Northern Europe (57 percent) than in Southern Europe
(41 percent). And a responsive staff was cited as extremely important by almost
equal numbers of shoppers in all regions.
Some differences along regional lines were particularly pronounced. For
instance, Southern Europeans placed much greater importance on whether a
retailer provided good handicapped access inside its store (see chart, left). In
the Southern European countries, handicapped access was rated as extremely
important by 73 percent of respondents, compared with 43 percent in Northern
Europe and 51 percent in the other three European countries.

Dcathlon
FNAC
Castorama
Leroy Merlin
Conforama
Darty
No favourite/no answer

12%
12%
6%
5%
5%
5%
29%

Note: In an open-ended question, consumers were


asked to name their favourite store in each channel.
Responses are for the country as a whole. As a result,
strong regional retailers may not appear on the list.
Totals for each channel do not equal 100% because
only the top responses, as well as the percent saying
no favourite or no answer are included.
The French retail market in most channels was characterised by distinct store preferences. The only exception
was the clothing/shoes/accessories channel, where the
mentions were dispersed among a wide array of retailers, which is not surprising given that this sector in
France is populated by a multitude of store banners.

The emphasis on this factor in some countries may be due at least in part
to the fact that the European population is aging considerably. For instance,
Francoscopie 2001 predicts that between 1990 and 2050, the population in
France aged 60 and older will double, those 75 and older will triple and those
aged 85 and older will quintuple.

17

Germany: Not by Price Alone


Thanks to the powerful discount channel, German shoppers have grown
accustomed to low prices. Winning their loyalty today requires focusing
on other factors as well.
It takes more than just low prices to
appeal to German consumers. That may
surprise those who thought Germany
was only about price, but our research
unequivocally pointed out that while
low prices are important, other factors
also matter.
Consumers in six of the nine European
countries we studied placed greater
emphasis on the response You feel you
are getting the lowest price available than
did those in Germany. Honest price was,
in fact, the highest ranking price-oriented
factor in Germany, as it was across Europe
overall. And the differential between the
number of German consumers who
ranked lowest price and those who ranked
honest price as extremely important was a
full 18 percentage points. Whats more,
none of the price-related factors ranked
among the top five responses in Germany.
However, this should not be interpreted
to mean that German consumers care
less about price than other Europeans,
but rather may suggest that they take low
prices as a given in the highly price-sensitive market. This is due in part to the fact
that the country has a mature and welldefined discount store channel. In addition, price differences tend not to be as
extreme in Germany as in some other
European countries. This situation actually
provides an opportunity for German retailers to differentiate themselves on other
attributes, while still ensuring that they
remain at industry par on price.
If German consumers take low prices for
granted, what else are they looking for
from retailers? It helps you a lot if everything in the store is organised in a logical
manner and the categories have been
marked clearly, said one shopper, echoing
the sentiments of others. Many of the
shoppers we interviewed pointed to factors more closely aligned with values
rather than just value. At my favourite
grocery store, the employees always greet
me in a friendly manner, said a 60-yearold female shopper. Theyve known me
for a long time, and its nice to have a chat
with them. Said another, I feel welcome
at the shop where I do my grocery shop18

ping. Its the personnel that makes the


difference.
The emphasis on values was supported in
our executive interviews as well. People
are going for the brands they trust, asking
more information from our consumer lines
and Internet site, and reassessing their
attitude, and thereby their emotions and
perceptions, of the products and brands
they are used to buying, said Stefano
Volpetti, Pampers brand manager for
Western Europe at Procter & Gamble.
Conversely, price has had no effect at all.
The higher quality that comes from better
materials, technologies and products costs
more, but the extra security is the value
that customers receive for the higher price.
While the responses both quantitative
and qualitative from German consumers
were similar to those of respondents in
the other European countries, there were
some differences as well. For instance,
Germans on the whole were less likely
than Europeans overall to rate the factors
related to shopping satisfaction as
extremely important.
In general, demographic differences did
not result in significant variances in
responses. The ranking of responses was
fairly consistent across age groups and
gender, although women in keeping
with the pattern throughout Europe
tended to assign greater importance to the
factors related to shopping than did men.
However, several of the 51 factors studied
resulted in a differential of 13 percentage
points or more, with women giving the
higher ratings: the store is clean and well
maintained (16 points higher); the store
location is close to your home (16 points);
the price is easily visible, the price is well
marked (13 points); it is easy to get down
aisles (13 points); prices do not fluctuate
from day to day (13 points); returning
merchandise is quick and hassle-free
(13 points).
The responses across regions within
Germany were also quite similar, although
a few points of difference emerged:
Responses to the price is easily visible,
well marked showed the highest degree

Store Preferences in Germany:


The Consumers View

of variance, with 76 percent of respondents in the Thuringen/Sachsen area rating it as extremely important, compared
with 44 percent in Baden-Wurttemberg
and 68 percent in Berlin.
The responses for offers leading brands
at lower prices also showed high variability, with 54 percent of consumers
in Berlin rating it extremely important,
while the other regions ranked it as less
important (29 percent of those in Bayern
and 33 percent in Baden-Wurttemberg,
for example).
Retail Channels and Stores:
Discounters Dominate

When it came to shopping frequency in


different retail channels, Germans showed
a much greater tendency to shop at discounters than did the rest of the European
consumers. Half of the German respondents indicated that they shop at discount
stores at least once a week, compared
with just 28 percent for Europe overall.
However, their shopping patterns for the
rest of the channels studied were quite
similar to those in the other countries.
Dominating the German discount market
is Aldi, which garners a market share close
to 50 percent, according to the European
Retail Handbook 2001/02. Its not surprising then that Aldi was named as the
favourite discounter by 32 percent of
respondents, far ahead of the other players
in the channel. With more than 3,000
units, the companys reach is extensive,
and it ranked as the preferred discounter
across all regions in Germany. Lidl, which
was named as the favourite discount store
by 9 percent of German respondents overall, showed the greatest strength in the
Berlin area, where it was cited as the preferred discounter by 18 percent of consumers. Both Aldi and Lidl appeared on
the list of favourite discounters in other
European countries as well. In the
Netherlands, for example, 19 percent of
respondents identified Aldi as their favourite
discounter and 3 percent named Lidl.

By contrast, the ratings in the supermarket


channel were more evenly dispersed, with
Real selected as the favourite store by
7 percent of consumers, Rewe by 5 percent,
Edeka by 5 percent, Kaufland by 4 percent,
Aldi by 3 percent and E-neukauf by
3 percent. Interestingly, 38 percent of
respondents could not name a favourite
supermarket. Some differences were
apparent by region: Real, for instance,
garnered 11 percent of the mentions in
the Hamburg region, but just 2 percent
in Bayern.
Consumers were quite definitive in their
choices in the department store channel,
naming Karstadt Quelle, Kaufhof and
C&A among the favourite retailers. The
choices were somewhat less defined in
the clothing/shoes/accessories, health and
beauty, and speciality store channels.

Company

% saying
favourite store

Supermarkets
Real
Rewe
Edeka
No favourite/no answer

7%
5%
5%
38%

Discount Stores
Aldi
Lidl
No favourite/no answer

32%
9%
44%

Department Stores
Karstadt Quelle
Kaufhof
C&A
No favourite/no answer

16%
10%
5%
53%

Clothing/Shoes/Accessories
Deichmann/Roland
Hennes & Mauritz (H&M)
C&A
No favourite/no answer

4%
3%
3%
62%

Health and Beauty

Similar to the rest of Europe, German


retailers in general were not clearly differentiated in the minds of consumers.
Exceptions included Real, Aldi, Lidl and
Deichmann/Roland. Aldi was one of the
most differentiated stores in Germany,
clearly identified by consumers as a
price/product company. The fact that a
significant number of customers selected
product as their secondary reason for
shopping at Aldi points to the strength
of the companys private label programme,
which constitutes the bulk of its product
offering. In the face-to-face interviews,
shoppers also cited the discounters return
policy, which allows merchandise to be
returned at any of the stores, regardless
of where it was purchased.

dm-drogerie markt
Mller
Schlecker
No favourite/no answer

8%
7%
7%
57%Speciality

Speciality Stores
Media Markt
No favourite/no answer

5%
64%

Note: In an open-ended question, consumers were


asked to name their favourite store in each channel.
Responses are for the country as a whole. As a result,
strong regional retailers may not appear on the list.
Totals for each channel do not equal 100% because
only the top responses, as well as the percent saying
no favourite or no answer are included.
Given Aldis substantial market share in the discount
channel, its not surprising that the company was named
as the favourite discounter by 32 percent of respondents, one of the highest ratings for any retailer in the
European countries studied. With more than 3,000 units,
the companys reach is extensive, and it ranked as the
preferred discounter across all regions in Germany. Lidl,
which was named as the favourite discount store by 9
percent of German respondents overall, showed the
greatest strength in the Berlin area.

19

Case Study
C&A Finds its Focus
The history of German clothing and
department store retailer C&A dates back
to the 17th century. Over the years, the
company has learned how to adapt to
changing consumer trends in order to
remain relevant in the marketplace. C&A
is currently in the process of just such an
evolution as it develops an appropriate
strategy to meet the needs of todays
consumers.
The retailers redirection and strategic
focusing follow a difficult period in the
late 1990s when it watched its market
share in Germany drop. The decline was
attributed to the fact that low price alone
was no longer sufficient to maintain sales
growth due to the emergence of new
competitors. As a response, C&A introduced a variety of new tactics, including
food corners, new brand concepts in the
stores and Internet shopping. However,
by doing this the company diluted its
focus on price and lost its clear dominating characteristic, and ultimately sales
did not increase.
C&As struggles led management to
rethink the companys direction in an
effort to regain its market share. The
winners in the German market are those
companies that have a clearly focused
strategy, said Thorsten Rolfes, press
spokesman for C&A. Companies that
float in between low price and superior
quality will lose the game.
The retailer instituted an aggressive price
programme. In addition, C&A returned to
its policy of offering primarily its own
labels, allowing the company to better
control the value chain. A new advertising programme was introduced that
emphasised value for money, helping
the company reposition itself as offering
fair prices in the marketplace. C&A executives note that the company constantly
communicates its price strategy externally to its customers, as well as internally
to employees. C&As price-dominant
focus was backed up by an improved
and more efficient logistics system.
However, management recognised that
price alone was not sufficient for the long
term, as German consumers look for
retailers to offer additional attributes.
Understanding that shoppers wanted

20

What German Consumers Want


Europe Top 5 Responses

% saying
extremely
important

Germany Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

The store is clean and well maintained

64%

Employees are courteous and respectful

69%

You can unconditionally return merchandise


with which you are unhappy

61%

The retailer provides consistently good


merchandise quality

67%
The retailer provides consistently good
merchandise quality

57%

The price is easily visible, the price is


well marked

64%
Employees are courteous and respectful

57%

You can unconditionally return merchandise


with which you are unhappy

60%

The price is easily visible, the price is


well marked

55%

And Dont Want From Their Shopping Experiences


Europe Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

You receive phone calls or mail informing


you of sales or special events

Germany Bottom 5 Responses

% saying
extremely
important

You can buy from the retailer through


catalogues or mail order

15%

You receive phone calls or mail informing


you of sales or special events

12%

13%
12%

The store plays music or videos that


enhance the shopping experience

11%

The store plays music or videos that


enhance the shopping experience

The store offers valet parking

10%

You can buy from the retailer through


catalogues or mail order

10%
You can buy from the retailer over the Internet

8%

You can buy from the retailer over the Internet

7%

something more, C&A launched an initiative to develop access as its differentiating characteristic, at the same time working to meet industry standards on the
remaining attributes of product, service
and experience.
To achieve its goal of developing access
as its secondary attribute, C&As management has focused on several factors:
high product availability with few out-ofstocks; easy navigation and manoeuvrability inside the stores; locations that are
easy to find; accessibility to a variety of

alternatives in terms of sizes, products


and product groups; simple presentation
allowing customers to easily find what
theyre looking for; and a quick and
simple refund policy.
People are bombarded with information,
so consumers are looking for shops that
are able to help them in making a decision, said Rolfes. They are looking for
a clear and simple presentation of the
products.

Italy: High Expectations From Demanding Consumers


Retail can be a tough business in Italy, where consumers place above-average
importance on shopping attributes and display a low degree of store preference.
Italian consumers place high demands on
retailers. Consider the fact that Italians
were much more likely than Europeans
overall to answer extremely important
regarding nearly all of the 51 factors related to their shopping satisfaction. For
instance, 81 percent of Italians said it was
extremely important that a store be clean
and well-maintained, compared with 71
percent for Europe overall; similarly, 80
percent of Italians pointed to the importance of courteous and respectful employees vs. the European average of 69 percent.
Our face-to-face interviews confirmed that
Italian shoppers expect a great deal from
retailers. A company must earn my choice
of where I buy, said a consumer in Milan.
Customers in Italy emphasised that retailers must deliver on their promises. In
describing her worst shopping experience,
one Italian consumer complained about
the difficulty she had when attempting to
exchange a product, even going so far as
to refer to it as a tragedy. I wont go
back there again, she said. I think that
the basic service of exchanging the product is a must.
Felice Simonpietro, CEO of Italian online
supermarket Volendo.com, pointed out
that negative customer experiences such as
these provide a learning opportunity for
retailers. If the consumer complains about
something thats wrong, this feedback is a
treasure for us, because we can take
advantage of this to improve our offerings, he said. And we are much luckier
than offline supermarkets because people
buying on the Internet are more likely to
use e-mail to communicate with the
retailer.
Both the quantitative and qualitative
research made it clear that values-related
factors such as respectful employees, consistently good product quality and honest
prices ranked high on the list of what matters to Italian consumers. Values are
always important in a commercial relationship, said one shopper. When you want
to establish a closer relationship with your
customer, its your fairness that will win
his confidence.

What Italian Consumers Want


Europe Top 5 Responses

% saying
extremely
important

Italy Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

The store is clean and well maintained

81%

Employees are courteous and respectful

69%

Employees are courteous and respectful

80%

The retailer provides consistently good


merchandise quality

67%

The retailer provides consistently good


merchandise quality

78%

The price is easily visible, the price is


well marked

64%

The retailer provides excellent handicap


access inside the store (that is, ramps,
electric carts for handicapped)

74%

You can unconditionally return merchandise


with which you are unhappy

60%
You feel that you are getting an honest price, 74%
that the price has not been artificially increased

And Dont Want From Their Shopping Experiences


Europe Bottom 5 Responses

% saying
extremely
important

Italy Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

It is easy to contact and obtain product


30%
information from the retailer by phone (e.g., do
they have it in stock, and how much does it cost)

You receive phone calls or mail informing


you of sales or special events

13%

The store plays music or videos that


enhance the shopping experience

28%

The store plays music or videos that


enhance the shopping experience

12%

You receive phone calls or mail informing


you of sales or special events

18%

You can buy from the retailer through


catalogues or mail order

10%

You can buy from the retailer through


catalogues or mail order

14%

You can buy from the retailer over the Internet

11%

You can buy from the retailer over the Internet

7%

21

Fairness, to listen to the customer and create intimacy this is a key point of
differentiation and a key success factor against competitors or new entrants.
Executives at Compar Bata S.p.a., a shoe
retailer, understand the growing role that
values play in commercial transactions.
When asked about the qualities that are
important to consumers, Barbara Mariani,
city store division manager for the company, said, Fairness, to listen to the customer
and create intimacy this is a key point
of differentiation and a key success factor
against competitors or new entrants.
A number of the consumers we spoke
with in Italy pointed to factors related to
the attribute of experience. I think its
important for a company trying to create
a special relationship with a customer to
make her feel good and anticipate her
needs, said one woman. For example,
a little corner area for quick shopping
without a queue would be wonderful.
Experience is also important in the consumer products sector in Italy. Companies
such as Liabel Spa, a leader in the underwear products business, have made experience their key point of differentiation.
Our mission is to always guarantee a
good feeling and a special relationship
with our customers when they buy a
product branded as Liabel, said Alfredo
Tedesco, sales and marketing manager
for the companys Over Skin division.

We want them to feel secure that they


made the right choice in terms of quality
and price.
Intimacy with customers is also crucial
to Birra Peroni Industriale S.p.a., a leader
in the Italian beer business. Andrea
Tamburelli, customer service manager,
noted that Peronis dominant market share
is maintained in large part because the
brand meets customers expectations in
terms of Italian tastes and fits with Italian
traditions. When an Italian customer
thinks about beer, he thinks, first of all,
about Peroni beer because its the traditional Italian beer, said Tamburelli.
Where Demographics and Fragmented
Distribution Play a Role

In Italy, as in the rest of Europe, women


were much more demanding about their
shopping experiences than were men. In
several instances, the difference between
the genders was particularly pronounced:
78 percent of women said that the price
is easily visible, the price is well marked
was extremely important, compared with
66 percent of men; and 70 percent of
women vs. 60 percent of men said it
was extremely important that employees
can answer most of your questions about
their products.

As with gender, some of the variances


by age were particularly significant. For
example, 71 percent of respondents 55 or
older said it was extremely important that
employees can answer most of your questions about their products. By comparison, only 54 percent of consumers aged
15-24 judged that factor to be extremely
important. However, factors such as
courteous and respectful employees and
a clean and well-maintained store were
considered to be extremely important
across all age groups.
At first glance, store preferences among
Italian consumers appear to be fairly low,
with responses dispersed among a number
of retailers (see chart, Store Preferences
in Italy: The Consumers View). However,
this reflects, at least in part, the fragmentation that exists in some of the channels
in Italy, particularly in the grocery sector,
which is characterised by a plethora of
small and medium-sized companies,
notes the European Retail Handbook
2001/2002. These retailers play to strong
regional, cultural and historical heritages
and atomised urban communities.
This market characteristic becomes more
clear when looking at the favourite stores
in different regions. In the supermarket
channel, for instance, Esselunga, which
received 7 percent of mentions overall in
Italy, was selected as the favourite supermarket by 17 percent of respondents in
the Northwest and by 10 percent in the
central region, but by almost no one in
the other regions. Thats no doubt due
to the fact that Esselunga operates only
in Lombardia in the Northwest and in
Tuscany, which is located in the central
area of the country.
Other Italian retailers such as Gruppo
Lombardini have also focused their strategy on meeting the regional tastes of customers by providing differentiated assortments. This has allowed the company to
compete successfully against the more
standardised offerings of some foreign
retailers that have begun to enter the market. (For more on Gruppo Lombardini, see
the case study titled Gruppo Lombardini:
Where Tradition and Innovation Meet.)

22

Case Study
Divani & Divani by Natuzzi:
Driving Trends in the Furniture Market
Italian furniture retailer Divani & Divani,
operated by Gruppo Natuzzi, understands that companies must focus their
business choices and strategies on real
and individual needs of consumers if
theyre to succeed in the marketplace.
Gruppo Natuzzi with its store brand
Divani & Divani has translated that
understanding into a business model
that allows it to dominate on access
and differentiate on product and, in the
process, drive trends in the Italian retail
furniture market.
The key to Divani & Divani by Natuzzis
dominance in the area of access lies in
both external and internal features. The
company has built up a network of stores
located in areas with good external
access and high visibility where there
is plenty of customer traffic. Internally,
an open sales floor with displays that
replicate room settings makes navigation
easy and allows consumers to see how
certain pieces of furniture, such as
couches, lounges or carpets, will look
in their homes. In this way, the company
offers a solution that fits the consumers
needs, desires or lifestyle.

Understanding that the marketplace and


consumers are constantly changing,
Divani & Divani by Natuzzi has considered the possibility that its future strategy may need to shift to a secondary
focus on experience rather than product,
as increasing competition may make it
difficult to maintain other points of differentiation.
By leveraging its primary and secondary
attributes, Divani & Divani by Natuzzi is
able to communicate a recognised identity around Harmony of living room,
in which the company combines all the
products from the couch or lounger
to the carpet, lamp or other home accessories in a unique style.

Store Preferences in Italy:


The Consumers View
Company

% saying
favourite store

Supermarkets
Coop
Esselunga
Conad
GS
No favourite/no answer

9%
7%
7%
5%
28%

Case Study
Gruppo Lombardini:
Where Tradition and Innovation Meet
Maintaining a sense of tradition while
remaining focused on the future can be
a difficult balance for many companies.
Italian retailer Gruppo Lombardini has
achieved that balance with a multichannel strategy that focuses on product and
service. The company operates nearly
500 units, consisting of hypermarkets,
supermarkets, discount stores, cashand-carry outlets and speciality stores,
with store brands that include Pellicano,
Continente, Comprabene and
GrosMarket. Gruppo Lombardini also
has a strategic partnership with
OnBanca (a financial services firm)
and Volendo.com, an innovative Internet
company.
Lombardinis product-dominant strategy
focuses on offering consistently strong
quality products, while also providing an
exclusive assortment based on local
traditions and tastes. Lombardini is
considered by many to embody the cult
of Italian food traditions. At the same
time, gourmet specialists regularly test
new assortments and products in order
to maintain the companys reputation for
innovation.

Hypermarkets

A well-trained service staff helps make it


easy for customers to find what theyre
looking for and supports the focus on
access. In addition, Divani & Divani by
Natuzzis access orientation extends to
its website, which also presents products
in room environments and provides
information and photos of various
styles and colours.
The access attribute is complemented by
a secondary focus on product, which is
based on not only providing consistently
good product quality but also by taking
it to a higher level of fashion. The key
elements of differentiation related to the
product attribute of Divani & Divani by
Natuzzi centre around versatility and the
companys high customisation capability
in terms of combinations (more than
2 million possible combinations) of the
components, including various functions,
colours, forms and covers. The retailer
reinforces its product focus through
innovation in technical design and
quality upgrading (for example, ISO
certification), updated products to
meet consumers evolving needs and
a distinctive fashion style.
Divani & Divani by Natuzzi also is competitive on price by offering consumers
consistent value. The company operationalises its pricing strategy through an
integrated production process. In fact,
about 92 percent of the raw materials
are provided by companies of Gruppo
Natuzzi. The group also effectively
manages its subcontractors.

Ipercoop
Auchan
Carrefour
Iper
No favourite/no answer

14%
7%
6%
5%
43%

Discount Stores
Lidl
No favourite/no answer

4%
80%

The retailers differentiation on the service attribute centres around its staff,
which is trained to provide customers
with information and support when
choosing products. In addition, employees are quick to offer customised
services or products to meet the needs
of shoppers. Company executives point
out that it all comes down to doing the
simple things right.

Department Stores
La Rinascente
Upim
Coin
Oviesse
No favourite/no answer

8%
6%
5%
5%
62%

Clothing/Shoes/Accessories
Benetton
No favourite/no answer

3%
63%

Health and Beauty


Body Shop
Bottega Verde
No favourite/no answer

1%
1%
76%

Speciality Stores
Media World
No favourite/no answer

2%
71%

Note: In an open-ended question, consumers were


asked to name their favourite store in each channel.
Responses are for the country as a whole. As a result,
strong regional retailers may not appear on the list.
Totals for each channel do not equal 100% because
only the top responses, as well as the percent saying
no favourite or no answer are included.
Store preferences among Italian consumers appear to
be fairly low, compared with some of the other European
countries. However, this reflects, at least in part, the
fragmentation that exists in some of the channels in Italy,
particularly in grocery. Regional and local retailers still
largely dominate the Italian market.

Lombardini has extended its service


offering with its Volendo.com online
channel, which was launched in June
2000 and includes more than 5,000
products split among the supermarket
and five other speciality stores: health
care and biological/ecological products,
wines, flowers, pet foods and home
furnishings.
While Volendo.com is part of the groups
overall multichannel strategy and a key
element in its service differentiation, the
online site operates with its own distinct
strategy based on service and experience.
The e-retailer dominates on service by
emphasising its short delivery time and
its pull approach to customer management. Volendo.com differentiates on
experience by building intimacy with its
customers through such approaches as
one-to-one marketing tools. The company points out that the online channels
goal is to provide an e-shopping experience that is a satisfying event for the
customers.

23

Netherlands: Making Good on Promises


The ability of retailers to deliver on their promises was a key issue for consumers
in the Netherlands, particularly when it came to factors such as pricing, return
policies and out-of-stocks.
The importance that consumers place on
values such as honesty and respect was
particularly apparent in the Netherlands.
Honest pricing, for instance, ranked
among the top five factors, cited as
extremely important by 64 percent of
Dutch consumers, one of the highest rankings among the nine countries.
The issue also came up frequently during
our face-to-face interviews with shoppers.
One customer described her worst shopping experience this way: Last month, I
bought a TV in a store that advertises that
they have the lowest prices. Later on, I
went into a different store where I saw that
same TV for less. It really upsets me when
people dont tell the truth.
Understanding the importance of honest
pricing is crucial for Dutch retailers that
choose to focus on price as their primary
attribute. We sell our products at honest
and realistic prices, as well as focusing on
very competitive special offers, said Johan
van de Werken, head of marketing, strategy and research for supermarket operator
C1000. He notes that C1000s own brand
has helped the company maintain its price
emphasis. The products are positioned as
good-quality, lower-priced products and

24

play a central role in C1000s marketing


campaign, which focuses on no gimmicks
that makes a difference.
The significance of values such as honesty
may also play a role in the responses of
Dutch consumers to a question about their
cost perceptions concerning the euro.
When asked whether they felt that with
the introduction of the euro, goods would
be more expensive than in their local
currency, 78 percent of those in the
Netherlands said yes. While this was the
highest among the six countries that have
moved to the new currency, the overall
European average was two-thirds, demonstrating a high degree of distrust among
consumers. And this scepticism came
despite attempts by many retailers to
assuage consumers concerns about
post-euro pricing.
In the area of service, ease of returns was a
critical issue for many Dutch shoppers, as
evidenced by both the quantitative and
qualitative research. The two factors related to returns You can unconditionally
return merchandise with which you are
unhappy and Returning merchandise is
quick and hassle free were rated as
extremely important by a higher percent-

age of respondents in the Netherlands


than in Europe overall. Return policies
were also the subject of many of the negative comments that arose during our
conversations with shoppers in the
Netherlands. I bought a shirt in a store
in a city far away from my home, said
one consumer. I wasnt happy with my
purchase and wanted to bring the shirt
back to the store in the same chain in my
own town, but they would not accept it
because I had not bought the shirt in that
particular shop.
Consumers also shared positive shopping
experiences, many of them related to the
service attribute. One woman described
her best shopping experience with this
service-oriented story: I wanted to buy a
foundation and was allowed to try it on.
However, at the time, it was dark outside,
and the foundation was one you would
wear during the day. The lady in the store
suggested I return when it was daylight
outside so that I was absolutely sure I was
buying the right colour. Clearly, the retailer in that case understood that dominating
on service involves providing real customer satisfaction instead of focusing on
the quick sale.

The ability of retailers to deliver on their


promises was a key issue for consumers in
the Netherlands, particularly when it came
to out-of-stocks. More than half of Dutch
respondents said it was extremely important that the retailer provides adequate
supply of merchandise and is rarely out of
stock. Complaints about out-of-stocks,
especially related to promotions, came up
often in our conversations with consumers.
What irritates me is when they advertise
that they have something on sale, but
when you come to the store, the article is
sold out, said one Dutch shopper. Even
if you come again later, the product still is
sold out. Thats when I get the feeling that
they are just luring me to the store.
In the area of product, factors such as
consistently good merchandise quality
also were important in the Netherlands.
For a product-dominant company such as
McGregor Fashion Group, which is both
a manufacturer and a retailer of clothing
and accessories, this is a critical issue.
Mike van Snek, commercial director, and
Kees van Muiswinkel, marketing and
communications manager, pointed out
that McGregor supports its product focus
and maintains a high level of consistent
quality with its own brand, which allows
the company to have control over product
development.
Dutch consumers also tended to rank
many of the access-oriented factors somewhat higher than the European average,
with close to 60 percent of the respondents rating Its easy to find what you
are looking for and Its easy to get down
aisles as extremely important. These
kinds of factors drive the strategy of a
company like department store operator
De Bijenkorf, which focuses on access as
its secondary attribute. The companys
stores are arranged by worlds, with like
products grouped together, resulting in a

convenient and easily accessible layout,


noted Ido Menko, head of research and
development, De Bijenkorf.
Demography Makes a Difference

While factors such as honest pricing and


easy returns were important to Dutch consumers across all gender and age groups,
other factors showed variations depending
on demographics. Overall, consumers
in the 15-24 age group were less likely
than others to rate any of the factors as
extremely important. For instance, only
a small percentage of the youngest consumers in the Netherlands were interested
in whether the retailer offered how-to
classes. On the other hand, almost half of
the shoppers between the ages of 45 and
54 and those older than 65 found this factor to be extremely important, compared
with just 24 percent for Europe overall.
Younger consumers were also less interested in factors such as receiving suggestions
or help in picking out items and whether
a retailer offered a delivery service.
Conversely, the oldest age group in the
Netherlands placed particular emphasis on
experience-oriented factors such as courteous and respectful employees, a responsive
staff and being treated as a valued customer.
Access for the handicapped was also high
on their list, with 81 percent of Dutch
consumers over 65 saying this was
extremely important, compared with the
European average of 57 percent. This may
be reflective of the aging population.
Analysts note that the percentage of the
Dutch population that is 65 and older has
grown significantly in the past 10 years.
According to the Netherlands statistics
bureau, the 65-plus cohort accounted for
13.6 percent of the population in 2000
and is projected to reach 15.4 percent
by 2010.

Last month, I bought a TV in a store that advertises


that they have the lowest prices. Later on, I went into
a different store where I saw that same TV for less.
It really upsets me when people dont tell the truth.

Case Study
The Albert Heijn Experience
With about 700 shops and a market
share of roughly 28 percent of the food
and daily goods market, according to the
European Retail Handbook 2001/02,
Albert Heijn is one of the leading Dutch
retailers, so its not surprising that it
would be named as the favourite supermarket by close to one-third of the
respondents in the Netherlands. The
company believes that its success is
based in large part on a corporate
strategy that focuses first on experience
and second on product.
The Albert Heijn experience is all about
establishing a sense of closeness to consumers by providing them with answers
to their everyday question: What shall I
eat today? The company offers answers
through such unique vehicles as its
AllerHande in-store publication, which
features information about products,
lifestyles and recipes using items sold
in Albert Heijn stores. The retailer also
offers an unusual savings account as
part of its Bonus card programme.
Instead of having a discount subtracted
from their bill, customers can choose to
open a savings account. The discount
is then applied to the account, and
customers can access their cash through
the in-store kiosks.
The retailers secondary emphasis on
product is supported by large assortments, high quality, innovative products,
both low-end and high-end private
labels, a strong focus on food safety,
and a large selection of ready-made,
take-home meal solutions. To ensure
that its product offering meets the everchanging needs of consumers, Albert
Heijn conducts what it calls operation
pit-stop every three years to reset the
store and category layouts.
Finally, Albert Heijn completes its strategic framework by maintaining market
parity on the attributes of service,
access and price. In terms of access,
for instance, the stores maintain a
consistency of layout, making it easy for
shoppers to find what they need. And
on price, the company provides value
for the money, with prices that are not
the cheapest but that are in accordance
with Albert Heijns image.

25

Case Study

Store Preferences in the Netherlands:


The Consumers View

Hema: Private Label Is Key to Product Dominance


There may be no better way to dominate on product than to have complete control
over every aspect of the offering. Hema, a Netherlands-based non-food retail operator,
achieves that dominance through its Hema own-brand products. Hema is one of the
few pure private label retailers in Europe, said Bart Koops, director, management services for the retailer.
The companys slogan, Its really Hema, speaks to the product orientation. The
Hema brand is recognised for its high quality and dependability, as well as for some
unusual items. The products are trend-based but can also be surprising, said
Koops. A good example of solving problems is allergies. A lot of people currently
suffer from allergies and so Hema sells anti-allergenic products such as duvets, etc.
He also points to the consistency in the assortment. Consumers know what to
expect, Koops said.
Hemas secondary focus is on access, in all its many forms. The stores are generally
positioned in A locations, while inside they feature wide aisles and an orderly and
logical presentation of products. The company goes a step further and provides a
sense of psychological access by positioning Hema as everyones store. The
use of ordinary Dutch consumers in its advertising and promotional campaigns helps
convey this sense of accessibility. Customers recognise themselves in the people
used, said Koops.
On the attributes of price, experience and service, Hema meets the market. On price,
for example, consumers know they will never be disappointed, noted Koops. It is
an honest price, but does not necessarily imply that Hema has the lowest price.

Company

% saying
favourite store

Supermarkets
Albert Heijn
C1000
De Boer
Konmar
Aldi
Edah
No favourite/no answer

32%
13%
9%
6%
5%
5%
4%

Discount Stores
Aldi
Lidl
Macro
No favourite/no answer

19%
3%
3%
60%

Department Stores
V&D
De Bijenkorf
No favourite/no answer

41%
16%
19%

Clothing/Shoes/Accessories
C&A
H&M
Miss Etam
No favourite/no answer

4%
3%
3%
40%

Health and Beauty


DA Chemist
Kruidvat
Etos
No favourite/no answer

What Dutch Consumers Want


Europe Top 5 Responses

% saying
extremely
important

Netherlands Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

The store is clean and well maintained

68%

Employees are courteous and respectful

69%

Employees are courteous and respectful

68%

The retailer provides consistently good


merchandise quality

67%

The price is easily visible, the price is


well marked

68%

The price is easily visible, the price is


well marked

64%

You feel that you are getting an honest price, 64%


that the price has not been artificially increased

You can unconditionally return merchandise


with which you are unhappy

60%

You can unconditionally return merchandise


with which you are unhappy

63%

And Dont Want From Their Shopping Experiences


Europe Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

You receive phone calls or mail informing


you of sales or special events

13%

The store plays music or videos that


enhance the shopping experience

12%

You can buy from the retailer through


catalogues or mail order

10%

You can buy from the retailer over the Internet

26

7%

% saying

Netherlands Bottom 5 Responses extremely


important
The store plays music or videos that
enhance the shopping experience

8%

You receive phone calls or mail informing


you of sales or special events

7%

You can buy from the retailer over the Internet

5%

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

4%

You can buy from the retailer through


catalogues or mail order

4%

23%
20%
11%
26%

Speciality Stores
Gamma
Praxis
Dixons
Bruna
Free Record Shop
No favourite/no answer

5%
4%
2%
2%
2%
47%

Note: In an open-ended question, consumers were


asked to name their favourite store in each channel.
Responses are for the country as a whole. As a result,
strong regional retailers may not appear on the list.
Totals for each channel do not equal 100% because
only the top responses, as well as the percent saying
no favourite or no answer are included.
Dutch consumers were quite definitive when it came to
their store preferences in many channels. Not surprisingly, dominant retailers such as Albert Heijn appeared at
the top of the list of favourite stores. Both the department store channel and the health and beauty channel
were well developed with a number of strong players,
unlike many countries in Europe. However, most retailers
in the Netherlands were not clearly differentiated in the
minds of consumers. When asked to name the primary
and secondary reason they shopped in their favourite
stores, consumers demonstrated little consistency.

Norway: Stores Struggle for Differentiation


Norwegian retailers were generally not well differentiated in the minds of
consumers, who demonstrated little consensus when it came to the reasons
they shopped at their favourite stores.

When Norwegian consumers were asked to name the primary and secondary reasons
they shopped at their favourite retailers, the answers were widely dispersed among the
five attributes of price, product, service, access and experience. While this also was true
to some degree or another in most of the European countries studied, it seemed to be
particularly acute in Norway. This was the case even among discount stores, which in
some of the other European countries tended to be more clearly differentiated first on
price and second on either access or product.
In addition, within most of the channels in Norway, there were no clear favourite retailers, with responses scattered among a large number of stores. This is not surprising,
given that in many channels, there are numerous store banners represented. However,
the overall retail market in Norway is, in fact, quite highly concentrated among a
handful of parent companies. This is particularly true in the supermarket and discount
store channels, where four large players control nearly 100 percent of the market:
Norgesgruppen, Hakon Gruppen, Coop Norge (Coop Norge is in the process of merging
with its sister organisations in Sweden and Denmark to form Coop Norden) and Reitan
Handel. Much of the concentration has resulted from a string of mergers and acquisitions
over the past three to five years. With little room left to grow inside Norway, many retailers are beginning to expand their view beyond Norway toward a more Nordic
perspective or an even broader European view.
The challenge for multibanner operators comes in identifying the appropriate
competitive positioning for each of the retail brands. Take, for example, the case of
Norgesgruppen. Norgesgruppen covers food retail chains and brands like Meny, Ultra,
Spar and Kiwi, said Runar Hollevik, marketing director. The market strategy and
the ownership of the chains is very different. Therefore, the Consumer Relevancy
methodology naturally must be used differently for each brand.
Of course, there were a few examples of retailers, such as Rema 1000, IKEA and Body
Shop, that did have a clear differentiation in the minds of Norwegian consumers. For
instance, the bulk of consumers identified price as their primary reason for shopping
at Rema 1000 and access as the secondary reason.

In general, factors related


to product were rated as
less important across the
board in Norway, compared with Europe overall.

The importance of developing a well-defined strategy was acknowledged by executives


with whom we spoke in Norway. The interesting thing is that our consumers have
defined five distinct attributes, which leaves us no other choice than to relate to
these attributes when we plan for the future, said Tor Norbye, chairman of Trumf, a
Norwegian loyalty card company that partners with businesses such as Norgesgruppen
and Shell. The Consumer Relevancy logic is a tool that makes it easier to understand
and structure where to focus and be best. And it underlines the importance of visualising
and communucating the same story to your customers.
Among the different retail channels in Norway, the discount food sector has grown considerably in recent years and now accounts for a significant share of the retail market.
The strength of the discount sector was reflected in shopping frequency patterns, with
40 percent of Norwegian consumers saying they shopped in a discount store at least
once a week, compared with the European average of 28 percent for that channel.

27

Consumers Focus on
Service and Experience

When consumers in Norway were asked


which values they looked for in the companies with which they do business, their
top response was honesty (25 percent),
which also ranked first in Europe overall.
However, the second highest response was
good service, cited by 24 percent of
Norwegian respondents. This was quite
different from Europe overall, which
ranked good service fourth on the list,
named by just 9 percent of respondents.
The importance of service in Norway was
reflected in the responses relating to the
51 factors influencing shopping satisfaction. The number one response related to
the service attribute was employees can
answer most of your questions about their
products, which was cited as extremely
important by 64 percent of Norwegians vs.
57 percent of Europeans overall.
Several of the experience-related factors
were also ranked highly, particularly those
having to do with employee interaction:
Employees are courteous and respectful
was named by 69 percent of consumers in
Norway as extremely important, and 67
percent said it was important that the staff
responds to concerns in a positive manner. The significance of this latter factor
was particularly pronounced in Norway,
where it ranked as the second highest
overall response. By comparison, this factor ranked 11th in importance in Europe
in total.
In general, factors related to product were
rated as less important across the board
in Norway vs. Europe overall. However,
while the ratings were lower, the rank
order of the individual factors was quite
similar to that in other countries. For
instance, consumers in Norway made it
clear that consistently good-quality merchandise mattered more than top-quality
products. In fact, the responses were
separated by a full 20 percentage points.
Demographics accounted for some variances in responses in Norway. For instance,
while the top 10 responses were the same
for both men and women, differences
became apparent further down the list.
Women placed much more importance
than men on certain factors, particularly
those related to access:

28

Retailer provides excellent handicap


access: 52 percent of women said this
was extremely important vs. 33 percent
of men.
Easy to get down the aisles: cited as
extremely important by 47 percent of
females but just 24 percent of males.
You can reach merchandise easily:
42 percent of women named this as
extremely important vs. 24 percent
of men.
Its easy to find what you are looking
for: identified as extremely important
by 54 percent of females, compared with
36 percent of males.
Based on the research, Internet shopping
seemed to be much more common in
Norway than in Europe in general. More

than one-quarter of consumers in Norway


said they had shopped online, compared
with 17 percent for Europe overall. The
only country that posted slightly higher
ratings for online shopping was neighbouring Sweden. But while a considerable
number of people in Norway said they
have made purchases on the Net, the frequency of buying is still quite low, in line
with the rest of the European countries.
The most frequent online buyers in
Norway, as in the rest of Europe, were
those in the 15-24 age group. Internet
purchase categories in Norway mirrored
those in Europe overall led by music
and books. However, Norwegians were
more inclined to buy electronic products
online than were consumers in the other
countries.

What Norwegian Consumers Want


Europe Top 5 Responses

% saying
extremely
important

Norway Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

Employees are courteous and respectful

69%

Employees are courteous and respectful

69%

Staff responds to concerns in a positive manner 67%

The retailer provides consistently good


merchandise quality

67%

The store is clean and well maintained

66%

64%

Employees can answer most of your


questions about their products

64%

The price is easily visible, the price is


well marked
You can unconditionally return merchandise
with which you are unhappy

60%

You feel that you are getting an honest price, 61%


that the price has not been artificially increased

And Dont Want From Their Shopping Experiences


Europe Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

You receive phone calls or mail informing


you of sales or special events

13%

The store plays music or videos that


enhance the shopping experience

12%

You can buy from the retailer through


catalogues or mail order

10%

You can buy from the retailer over the Internet

7%

Norway Bottom 5 Responses

% saying
extremely
important

The store offers valet parking

6%

You can buy from the retailer through


catalogues or mail order

4%

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

3%

You can buy from the retailer over the Internet

3%

The store plays music or videos that


enhance the shopping experience

3%

Store Preferences in Norway:


The Consumers View

Case Study
Work in Progress: Coop Norge
Assesses its Relevancy Positioning
As a multiformat retailer, Coop Norge is
faced with the challenge of finding the
appropriate consumer-centric strategy
for each of its chains, consisting of Coop
Prix, Coop Mega, Coop Obs! and Coop
Marked. However, before the correct
strategic framework can be determined,
the company first needed to assess the
current positioning of its chains based on
the Consumer Relevancy model of dominating on one of the five attributes, differentiating on a second and meeting
industry par on the remaining three.
In that assessment (see accompanying
chart), Jon Eskedal, chain director for
Coop Norge, and his team considered
how each of the companys four chains
measured up in the areas of access,
experience, price, product and service.
Heres what they found:
Coop Prix, the discount store chain,
rated a 4 (differentiation) on the
attributes of price and service, and a
3 (meeting industry par) on access,
experience and product, but did not
rate a 5 (domination) on any of the
five attributes.
Supermarket chain Coop Mega
achieved a score of 5 on experience,
but a 4 on both product and service,
and a 3 on access and price.
Coop Obs!, the companys hypermarket
chain, was rated a 4 on experience,
price and product, and a 3 on access
and service.
Coop Marked, a chain of smaller neighbourhood grocery stores, achieved a
4 on service, but a 3 on the remaining four attributes.

Viewed through the lens of Consumer


Relevancy, its clear that none of Coop
Norges chains currently are as well differentiated as they could be. The company isnt alone, however. Very few of the
retailers in Norway or in Europe as a
whole, for that matter were clearly
defined in the minds of consumers in
terms of the five attributes.
In a separate assessment, Eskedal and
his team took a similar approach to the
discount channel overall in Norway by
rating Coop Norges Coop Prix discount
stores and three of its competitors. The
result? None of the chains measured up
to the dominate/differentiate model. In
the case of Coop Prix, Eskedal noted
that the company would like the stores
to be viewed as the price-dominant
chain where consumers can shop efficiently, saving time and money. However,
based on the assessment, Coop Prix is
not currently fully accomplishing this
objective.
As for the competition in the discount
channel, Competitor A rated a 4 on
price, but a 3 on all the other attributes. Competitor B achieved a score of
5 on price, a 4 on access, a 3 on
experience and service, but only a 2
on product. And Competitor C received
a score of 5 on access, but a 3 on
the other four attributes.
Clearly, theres market branding work
to be done by all these retailers. And,
according to Eskedal, thats exactly
what Coop Norge has begun to do
within its organisation.

Company

% saying
favourite store

Supermarkets
Rema 1000
Coop Mega
Meny
Coop
ICA
Rimi
Ultra
Coop Obs!
No favourite/no answer

12%
6%
6%
5%
4%
4%
4%
4%
34%

Discount Stores
Rimi
Rema 1000
Europris
Coop Prix
Kiwi
Nille
No favourite/no answer

12%
12%
4%
3%
3%
3%
52%

Department Stores
IKEA
Steen & Strm
Coop Obs!
No favourite/no answer

4%
4%
3%
48%

Clothing/Shoes/Accessories
Hennes & Mauritz (H&M)
Dressmann
No favourite/no answer

6%
4%
51%

Health and Beauty


Body Shop
Vita
No favourite/no answer

3%
3%
82%

Speciality Stores
Intersport
Elkjp
G Sport
Tanum
No favourite/no answer

2%
2%
2%
2%
57%

Note: In an open-ended question, consumers were


asked to name their favourite store in each channel.
Responses are for the country as a whole. As a result,
strong regional retailers may not appear on the list.
Totals for each channel do not equal 100% because
only the top responses, as well as the percent saying
no favourite or no answer are included.

Coop Norge Assesses its Chains


3 = Meet industry par (minimum score)
4 = Differentiate
5 = Dominate

Within most of the channels in Norway, there were no


clear favourite retailers, with responses scattered among
a large number of stores. When Norwegian consumers
were asked to name the primary and secondary reasons
they shopped at their favourite retailers, the answers
tended to be widely dispersed among the five attributes
of price, product, service, access and experience. While
this fact was apparent to some degree or another in
most of the European countries studied, it seemed to
be particularly acute in Norway.

5
4
3
2
1
0

Coop Prix

Coop Mega

Coop Obs!

Coop Marked

(discount store)

(supermarket)

(hypermarket)

(neighbourhood store)

Access

Experience

Price

Product

Service

Source: Courtesy of Coop Norge


Coop Norge, one of Norways leading retailers, whose Coop Prix, Coop Mega, Coop Obs! and Coop Marked
chains garner a substantial market share in the food sector, assessed its chains based on the Consumer Relevancy
model. This chart reflects the positioning of the chains, as mapped by Jon Eskedal, chain director for Coop Norge.

29

Spain: Shopping Is Serious Business


The Spanish retail landscape is characterised by strong competition, high price
sensitivity and an abundance of stores. In this environment, consumers place
especially high importance on the factors surrounding their shopping experiences.

Some European analysts have deemed


Spain to be a particularly competitive
market and for good reason. Spain has
the greatest number of retail outlets among
the European countries studied with more
than 600,000 shops, according to the
European Retail Handbook 2001/02.
That translates to a shop density of one
outlet per 64 Spaniards. Given this degree
of competition, Spanish consumers can
afford to be demanding. Spanish respondents gave higher-than-average ratings to
all but three of the 51 factors related to
their shopping satisfaction, compared with
Europe overall.
Considering the competitive nature of the
retail business, its not surprising to find
that Spanish consumers are particularly
price sensitive. Many of the price-oriented
factors ranked higher in importance in
Spain than in the other countries. However,
even in this price-conscious environment,
honesty in pricing was still highly valued.
Three-quarters of Spanish respondents
said honest price was extremely important,
compared with 55 percent who said
lowest price and 62 percent who cited
the retailer offers guaranteed lowest prices
(matching competitors coupons, promotions, etc.).
Antonio Palazn, commercial director for
supermarket operator Champion, offers a
further explanation for the price emphasis,
noting that Spains standard of living is
below that of many other European coun-

tries. A recent study shows that 60 percent of Spaniards do not save money, and
out of this 60 percent, one-third barely
make it to the end of the month, he said.
If there is an extra expense during the
month, the budget is so tight that credit
cards are used and people just hope for
the best. This fact is one of the main
reasons that explains the success of priceoriented strategies in our country, like
Dia and Mercadona.

In most of the channels in Spain, one


retailer tended to rise above the others as
consumers preferred choice. For instance,
14 percent of shoppers cited Mercadona
as their favourite supermarket, followed
by Dia, which was named by 5 percent.
However, Dia led the discount channel,
cited by 13 percent of consumers as their
favourite. Among hypermarkets, Carrefour
led the list, with 22 percent of mentions
as the favourite retailer.

But shopping isnt only about price. The


importance of values such as honesty
came up repeatedly during our consumer
interviews in Spain. If stores dont have
exactly what youre looking for its better
to say, sorry, we are out of stock or
simply, we dont supply that, said one
shopper.

Jos Mara Folache, Carrefours CEO,


Spain, talked about the challenges and
opportunities for hypermarket operators.
Time value is the most important trend
for todays Spanish consumer, said
Folache. This is a handicap for the hypermarket format in food purchasing, as our
business model is not based on proximity
and as the legal restrictions make it more
difficult for us to be the price leader. On
the other hand, it is also an opportunity,
as we offer a formula which satisfies the
global necessities of a family all in the
same purchasing act.

Luis Gil, commercial director, Ahold


Supermercados, noted that confidence also
plays an important role in the retail equation. Confidence and honesty are very
tight together; confidence is the key word,
he said. Having fresh products on display
is what clients demand. Clients expect
phone orders to be on time and with the
quality and service that they expect. Other
issues not linked to the core business,
such as the support of handicapped people, are also very valued by customers.
In fact, 79 percent of Spanish consumers
cited excellent handicap access as extremely important, considerably higher than the
European average of 57 percent.

The strongest store preference results were


recorded in the department store channel,
where El Corte Ingls was named as the
favourite by 39 percent of Spanish respondents. This is largely due to the lack of
competitors in the channel. In general,
consumers with whom we spoke pointed
to positive experiences with the department store giant. For instance, one shopper said his best shopping experience
involved buying a television at El Corte
Ingls. The attention received from the
salesperson was quite good; they dedicated
a lot of time to explaining to me about the
different options, he said. The product
was a very good quality with good performance and a long guarantee period.
Executives from El Corte Ingls acknowledge the importance that values such as
honesty and respect play in the companys
operation. They noted that these values
form the foundation for building an ongoing and lasting relationship with their
clients, as well as the best guarantee for
future sustainable profits.

30

Case Study
Aldeasa: Access
is the Pillar of
our Business
With 127 airport shops in Spain and
42 around the world, Spanish retailer
Aldeasa understands the importance of
access. Access is the pillar of our business, said Eugenio Andrades, strategy
and planning director for the company,
which also operates shops at museums,
monuments and other tourist venues.
We have a captive client who is attracted to our stores because they are about
to travel, therefore we have to be present
in his walking route. In our case, the
location, location, location precept is
still fundamental. Being in one or another
point in the airport is the difference
between selling and not selling.
However, Aldeasa is also focused on
the internal makeup of its stores.
Convenience is a key aspect, particularly
for its Spanish clientele, who tend to be
business travellers and tourists. To better
define its product assortment inside its
stores, the company has introduced
space management techniques that are
new to its retail sector. Aldeasa has also
established a system of unified merchandising criteria in its stores.
The companys secondary focus on
price is geared in large part to its foreign
tourist clientele, especially English and
Germans, who tend to be price-oriented
shoppers. It is erroneous to believe that
the tax-free savings offered to our clients
is our only competitive advantage, said
Andrades, who noted that legislation has
largely abolished that advantage. The
company operates with a centralised
pricing system, working directly with

manufacturers to jointly establish a consistent retail price positioning that is


somewhat lower than the street shops.
The centralised policy, however, still
allows for local customisation where
necessary.
Aldeasa hasnt ignored the other attributes. For instance, it has established an
employee training programme designed
to improve customer service levels. And
it has begun to incorporate new brands
into the stores to provide a more consistent product offering targeted to its multidimensional customer base. The company has also taken steps to streamline its
supply chain operation by centralising

fulfilment through a clearing warehouse


in Barcelona, from which shops are supplied two to four times a week (twice a
month for the international stores).
Company officials believe that Aldeasas
strategy will allow it to maintain its current strong position in Spain and continue its international expansion. I really
think that we are a success story, said
Andrades. We have developed from
being a single tobacco and spirits store
in Madrids airport to being a multiproduct/multibrand operator on a global
scale, and we have quadrupled our
sales in the last seven years.

What Spanish Consumers Want


Europe Top 5 Responses

% saying
extremely
important

Spain Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

The store is clean and well maintained

84%

Employees are courteous and respectful

69%

The retailer provides consistently good


merchandise quality

79%

The retailer provides consistently good


merchandise quality

67%
79%

The price is easily visible, the price is


well marked

64%

The retailer provides excellent handicap


access inside the store (that is, ramps,
electric carts for handicapped)
Employees are courteous and respectful

77%

You can unconditionally return merchandise


with which you are unhappy

60%
Prices do not fluctuate from day to day

75%

And Dont Want From Their Shopping Experiences


Europe Bottom 5 Responses

If stores dont have


exactly what youre
looking for its better to
say, sorry, we are out
of stock or simply,
we dont supply that.

% saying
extremely
important

Spain Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

The store plays music or videos that


enhance the shopping experience

You receive phone calls or mail informing


you of sales or special events

13%

The retailer offers several different price points 21%


for similar products of varying quality

12%

You receive phone calls or mail informing


you of sales or special events

19%

The store plays music or videos that


enhance the shopping experience

10%

You can buy from the retailer through


catalogues or mail order

10%

You can buy from the retailer through


catalogues or mail order

You can buy from the retailer over the Internet


You can buy from the retailer over the Internet

26%

8%

7%

31

Spanish Leaders Speak Out


Store Preferences in Spain:
The Consumers View
Company

% saying
favourite store

Supermarkets
Mercadona
Dia
Carrefour
Caprabo
El Arbol
Eroski
No favourite/no answer

14%
5%
3%
3%
3%
3%
41%

Hypermarkets
Carrefour
Hipercor
Alcampo
Eroski
Mercadona
No favourite/no answer

22%
9%
6%
5%
4%
40%

Discount Stores
Dia
Lidl
No favourite/no answer

13%
2%
77%

Department Stores
El Corte Ingls
Carrefour
No favourite/no answer

39%
1%
52%

Clothing/Shoes/Accessories
Zara
El Corte Ingls
No favourite/no answer

9%
4%
61%

Health and Beauty


Druni
Body Bell
Eurodroguer
Gil-Go
Zuetxe
Mariposas
No favourite/no answer

2%
1%
1%
1%
1%
1%
69%

Speciality Stores
Dcathlon
FNAC
No favourite/no answer

2%
2%
71%

Note: In an open-ended question, consumers were


asked to name their favourite store in each channel.
Responses are for the country as a whole. As a result,
strong regional retailers may not appear on the list.
Totals for each channel do not equal 100% because
only the top responses, as well as the percent saying
no favourite or no answer are included.
The lack of retail differentiation that exists throughout
Europe was also reflected in Spain, with El Corte Ingls
being an exception. This fact makes it clear that there
are opportunities for retailers to differentiate their offering and dominate the consumer mind share through
the adoption of a more focused strategy.

Executives from leading retail and consumer products companies in Spain offer their thoughts on the underlying trends related to Consumer Relevancy, the importance of values and the changing business climate.
On consumer trends
Albert Bricall Orellana, corporate commercial director, Nestl Espaa, S.A.: Consumers have a
higher education level and a more critical attitude, facts that make them more sensitive to the qualityprice relationship Consumers value their scarce time more than ever before (time poor). They require
more information on products, but ironically they do not have enough time to read it, which is another
advantage for strong and recognised brands.
Jos Luis Prez, national accounts manager, Nutrexpa: Spanish consumers are becoming as
demanding as European or U.S. consumers in terms of purchasing. Sensitivity to food quality has
increased rapidly in the last three to four years. Consumers have become more conscious of what they
are buying. They are still less demanding, however, in terms of service or when looking at post-purchase
complaints.
Paloma Elegido, CEO, General Mills Ibrica: Consumers look for value for money, that is, a good
price/quality ratio. Additionally, they want time convenient products. They are also interested in fun
foods and cooking and healthiness.
Augusto Arquer, trade marketing manager, Kimberly-Clark: There is a high level of loyalty toward
stores where consumers have the perception that they are going to save time. Consumers receive 1,000
messages weekly (radio, TV, magazines, etc.), a fact that creates a lot of confusion. To ease the purchasing process is fundamental nowadays.
Carlos Prez, CEO, Enaco: Currently, we are facing a contradictory consumer, with a higher income
level, but, on the other hand, more price sensitive. We think this is due to the evolution of certain retail
formulas whose positioning has evolved towards price, and they have succeeded in educating the consumer. Consequently, traditional barriers between formats associated with clients income level tend to
disappear.
Jos Luis Lomas, commercial director, Grupo Panrico: Consumer segmentation is a practice that we
rarely use. Our products are mass-market oriented, very generalist. We would rather put an emphasis on
channel segmentation because we think that the consumer changes skin and we want to be sure to be
there whenever they decide to change. Fine-tuned segmentations, micro-marketing, etc., appear to me
to be dangerous exercises that may even limit the coverage our brands currently possess.
On values and the context surrounding business transactions
Ricardo Currs, commercial director, Dia: More and more, I believe that values are essential, with
honesty the most important one. At Dia, we respond to this trend by being the Spanish reference in terms
of price. But we are conscious that price for price is not enough. We want to offer the best quality/price
ratio in the market, with our own brand and national leader brands too.
Miguel Angel Granda, director, E. Leclerc Spain: A system we use to generate context is through the
adaptation of each hypermarket to its local environment, a fact that we enhance by placing significant
amounts of local products in the assortment. We also provide sponsorships to local sports teams, community meetings in our facilities, etc. in other words, our adaptation to the local way of life.
Manuel Alcolea, CEO, Kraft Foods Espaa, S.A., and president of ECR Espaa: We try to transfer to
the consumer the values of our brands (Saimaza coffee: emotional encounters; El Casero cheese: kids
nutrition). All of our strategy (new products included) is based on our consumers necessities, focusing
on relevant and emotional issues.
Miguel Calatayud, CEO, Noroto, S.A.: Consumers are giving more and more importance to values.
In a business like ours (car maintenance and spare parts selling), security is essential and is the main
attribute we try to transmit.
Jordi Mir, sales director, Danone, S.A.: I believe that in this matter the pendulum theory applies:
Throughout the years, Western culture has moved us away from the basic life values, but now we are all
heading back to them. The September 11, 2001 events probably reinforced this back-to-values feeling
worldwide. Those companies that reinforce the belief in human values will be the winners of tomorrow,
as long as they also maintain a basic offering that performs well.
Miguel Angel Lopera, fabric and home care products, Iberia director, Procter & Gamble: We are
convinced that delivering context is essential in formulating any commercial strategy. Today, there are
clear differences between products that can be identified technically or directly by the consumers.
However, the gap is not so huge as some years ago, which is the reason why context has become more
and more important for brands.
On the changing business climate
Marcos de Quinto, president, Coca-Cola Espaa: It is being demonstrated that all formulas have their
own place in the marketplace. But the evolution is tremendous and continues to increase, and it is
becoming harder to draw border lines. Probably in a short time, Mercadona, for example, will consider
McDonalds as a competitor in the meal solutions segment.
Fernando Valds, CEO, Lever Faberg (Unilever Group): Spain has a proven market know-how in
terms of strategic definition, and the textile industry is a good example of it. Zara, Camper, Coronel
Tapiocca, Massimo Dutti, Cortefiel they have effectively blocked the entrance of the main world players
into the Spanish textile industry. They have done well and their value propositions have gone beyond our
frontiers and have been imitated all over Europe. Unfortunately, food retailing is an industry that has been
left behind in this race.

32

Sweden: Where Service Reigns Supreme


The importance of service was especially pronounced in Sweden, with
consumers placing particular emphasis on easy, hassle-free returns.
The customer is always right. Its a fundamental rule in the retail business everywhere.
And its crucial to the strategy of any retailer that hopes to dominate on the attribute of
service. That fact was apparent throughout Europe, where the ability to unconditionally
return merchandise was among the top five factors overall.

I keep telling people to


stay out of that store.
You should not be in the
business if you dont think
that the customer is
always right.

The importance of service was particularly pronounced in Sweden. Swedish consumers


consistently placed the greatest emphasis on the service-oriented factors related to shopping satisfaction, compared with the other attributes of price, product, access and experience. The highest-rated factor related to service was you can unconditionally return
merchandise with which you are unhappy, cited as extremely important by 64 percent
of Swedish respondents. That was followed by returning merchandise is quick and
hassle free, with 63 percent saying this was extremely important.
The critical role played by service was also apparent in the face-to-face interviews with
Swedish consumers. When customers were asked about their best and worst shopping
experiences, their responses more often than not came down to issues related to service,
particularly the ability to easily return items. One young woman described an unpleasant
experience she had trying to return a pair of earrings that had broken shortly after she
purchased them. When I came back, they told me that they could fix them, but that I
would have to pay for it. Shame on them! she said. I keep telling people to stay out of
that store. You should not be in the business if you dont think that the customer is
always right.
Conversely, consumers positive shopping experiences also tended to focus on service and
ease of returns. At H&M, you can always return your clothes, said a Swedish woman.
I prepare myself for an argument, but they always take the clothes back without questions or hassle, even if the price tag or other markings are missing.
Jrgen Johansson, CEO of Lindex, one of Swedens largest clothing retailers, understands
the challenges associated with serving todays empowered consumers. We see a more
demanding consumer with individual needs that are very complex to meet, he said.
You cannot judge a person by the clothes he is wearing. He might look casual to you,
but normally he wears a pin-striped suit and works as a banker. People act and behave in
different ways on various occasions. This makes it very hard for marketers and it makes
it complex for us to position our stores. We tend to look more at lifestyles and values
rather than socioeconomic data. While the complexity of the individual makes it very
hard to position your brand or store, it also makes it clear that you need to be focused
about your message.
In keeping with the trend throughout Europe, women in Sweden were more likely to rate
the 51 factors related to their shopping satisfaction as extremely important, compared
with men. In a few cases, the difference was particularly pronounced:
Returning merchandise is quick and hassle free was identified as extremely important
by 74 percent of women, compared with 52 percent of men.
Prices do not fluctuate from day to day was cited by 60 percent of women, compared
with 38 percent of men.
Employees are courteous and respectful was named as extremely important by 77
percent of women, compared with 55 percent of men.
Making Choices By Channel and By Store

A few variances related to shopping frequency by channel emerged from the research.
For instance, more than two-thirds of Swedish consumers said they shopped at a supermarket more than once a week, significantly higher than the European total of 42 percent
for the supermarket channel overall. Analysts believe this is due to the fact that there are
very few remaining butchers, bakeries or other small food stores in Sweden, causing
consumers to shop at supermarkets more often.
The reverse was true in the health and beauty channel, where shopping frequency was
lower in Sweden, with almost three-quarters of consumers saying they shopped in this
33

The online channel stood


out in Sweden, with 27
percent of respondents
indicating that they had
shopped over the
Internet, the highest
percentage in the nine
European countries.

channel less than once a month vs. the European total of 43 percent. This is likely due
to the fact that most health and beauty formats are relatively new to Sweden. Consumers
are more likely to buy their health and beauty products in supermarkets and department
stores. The channel may heat up, however, with the entrance of Aholds Dutch health
and beauty care chain Etos, which opened its first two stores in Stockholm in February.
In many retail channels in Sweden, there were no dominant favourite stores. An exception was the department store channel, where hlns was named as the preferred retailer
by 14 percent of consumers. And in the supermarket channel, 29 percent of respondents
named ICA as their favourite retailer. ICA, which is 50 percent owned by Ahold, was also
named by 5 percent of respondents as their favourite discount store and even received
2 percent of the mentions in the department store channel. Consumers strong preference
for ICA is not surprising, given that the retailer dominates the food and daily goods sector, with close to 2,000 units and a market share of more than 35 percent, according to
the European Retail Handbook 2001/02.
As a leading retailer in Sweden, ICA/Ahold recognises that its responsibility extends to
areas such as social issues. When asked to identify the next big issue in the Swedish retail
business, Kerstin Lindvall, who is responsible for environmental issues at ICA/Ahold,
noted in a recent issue of Swedish newspaper Dagens Handel, It will be about social
responsibility ... It can be about how we purchase from the third world or how we handle matters related to child labour. In short, social responsibility. ICA cooperates with the
Red Cross who have helped tham set a policy on how to handle purchases from the third
world. Other important issues are fair salaries, discrimination, handling of chemicals
and concerns about the rain forests, said Lindvall.
The online channel stood out in Sweden, with 27 percent of respondents indicating
that they had shopped over the Internet, the highest percentage in the nine European
countries. The overall average for Europe was just 17 percent. Some analysts note that
Swedens higher rate of Internet shopping may be due to its relative remoteness and
high-tech orientation. They point out that technology is generally viewed in a positive
light in the country thats home to tech leaders such as Ericsson.

Case Study
Statoil Detaljhandel: Making Everyday Life Easier for Customers
Statoil Detaljhandel Skandinavia, which runs 1,500 gas and convenience store outlets
in Sweden, Norway and Denmark, operates in a business with shrinking margins
and tough competition from convenience stores, fast-food outlets and supermarkets.
Maintaining growth and standing out from the crowd require strong positioning.
The strategy that Statoil has chosen focuses first on access and second on service.
Our mission is to make the lives of our consumers easier and less stressful, said
Mats Holgerson, president of Statoil Detaljhandel Skandinavia, which is a 50/50 joint
venture with Swedens ICA supermarket chain.
Statoil has focused on both external and internal access. External access in the form
of numerous outlets that are strategically and conveniently located, along with convenient parking and long opening hours, remains important in the convenience store
channel. From an internal perspective, the layout of the shops is critical in achieving
the goal of easy access. The company offers what it calls Quick Stop and One
Stop. The former means that shopping should go quickly, while One Stop means
that all the most commonly required products should be available, said Holgerson.
Statoil differentiates on the attribute of service, a key area considering that the majority of its employees work in customer-facing positions. The focus on service has been
a major part of Statoils programme to strengthen its competitive positioning. The
company offers a full line of services, including petrol, car wash, car services, carrelated products, car rental, fast food and home entertainment. There are other opportunities to expand its focus on service by extending its petrol stations as pickup
locations for products from postal order companies, dry cleaners, theatre tickets, etc.,
as well as adding banking and postal services.
Company executives also understand that Statoil must meet the market standard on
the three remaining attributes. The range of products is broad but shallow, in keeping
with the norm in the convenience store channel. Company executives note that the
combination of low investment costs and relatively high profitability enables Statoil
to maintain a fair price level. And in terms of experience, Statoil aims for a friendly,
personal environment rather than fancy interior dcor.

34

Case Study

Store Preferences in Sweden:


The Consumers View

H&M: Balancing Price and Quality


A strong and focused strategy is particularly important in Swedens retail clothing
business, where the competitive pressure is increasing. To maintain its dominance
in this environment, Swedish-based clothing company H&M (Hennes & Mauritz)
has established a positioning based on price as its primary attribute and product as
its secondary focus.
H&M is considered to have consistently low prices based on an everyday low price
(EDLP) model. The companys price-dominant strategy is supported by direct buying
with little use of middlemen and by purchasing product in large volumes. With close to
800 stores in 14 countries and a market share in Sweden estimated by analysts at
about 11percent, H&M is able to take advantage of its economies of scale. The retailer
also benefits from its efficient distribution systems and an emphasis on cost-consciousness in every aspect of its business.

Company

% saying
favourite store

Supermarkets
ICA
Konsum
Hemkp
No favourite/no answer

29%
11%
4%
22%

Discount Stores
Willys
Rimi
ICA
No favourite/no answer

6%
5%
5%
5%

Department Stores

However, H&Ms price leadership may be tested, as international competitors, such


as Inditex (which operates store brands like Zara and Massimo Dutti), Gap and The
Limited, begin to look at the Swedish market. The clothing sector in Sweden is already
competitive due to the presence of retailers such as Lindex, Kapp Ahl and JC.
To complement its price focus, H&M differentiates on product, by offering a wide
assortment of a consistent and fair quality that fits the everyday low-price image.
The companys products are generally viewed as fashionable and trendy and cover
a range that includes underwear, suits, fashion, leisure and sports.

hlns
NK/Nordiska Kompaniet
Obs
Coop/Coop Forum
IKEA
Maxi
ICA
No favourite/no answer

14%
5%
4%
4%
2%
2%
2%
50%

Clothing/Shoes/Accessories

The company meets the market standards on the remaining attributes. In the area of
service, however, H&M is considered to have a strong return policy, a key issue with
many Swedish consumers, based on our research.

Hennes & Maurtiz (H&M)


Kapp Ahl
Lindex
No favourite/no answer

7%
5%
4%
44%

Health and Beauty


Kicks
Body Shop
hlns
No favourite/no answer

What Swedish Consumers Want


Europe Top 5 Responses

% saying
extremely
important

Sweden Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

The store is clean and well maintained

67%

Employees are courteous and respectful

69%

Employees are courteous and respectful

66%

The retailer provides consistently good


merchandise quality

67%

The price is easily visible, the price is


well marked

64%

The price is easily visible, the price is


well marked

64%

You can unconditionally return merchandise


with which you are unhappy

64%

You can unconditionally return merchandise


with which you are unhappy

60%

Returning merchandise is quick and


hassle free

63%

And Dont Want From Their Shopping Experiences


Europe Bottom 5 Responses

% saying
extremely
important

Sweden Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

7%

You receive phone calls or mail informing


you of sales or special events

13%

The store offers valet parking

6%

12%

The store plays music or videos that


enhance the shopping experience

4%

The store plays music or videos that


enhance the shopping experience

10%

You can buy from the retailer through


catalogues or mail order

4%

You can buy from the retailer through


catalogues or mail order

You can buy from the retailer over the Internet

4%

You can buy from the retailer over the Internet

4%
2%
2%
80%

Speciality Stores
Akademibokhandel
Bokia
Clas Ohlson
Stadium
No favourite/no answer

3%
2%
2%
2%
55%

Note: In an open-ended question, consumers were


asked to name their favourite store in each channel.
Responses are for the country as a whole. As a result,
strong regional retailers may not appear on the list.
Totals for each channel do not equal 100% because
only the top responses, as well as the percent saying
no favourite or no answer are included.
In many retail channels in Sweden, there were no dominant favourite stores. An exception was the department
store channel, where hlns was named by 14 percent
of consumers. And in the supermarket channel, 29
percent of respondents named ICA as their favourite
retailer. As was the case throughout Europe, the
majority of retailers in Sweden were not well defined in
shoppers minds in terms of the Consumer Relevancy
model. One exception was hlns, which was identified
by respondents as a product/access retailer. In most
other instances, the attribute combinations were quite
disparate, although in Sweden they were less clustered
around price/product than in some other European
countries.

7%

35

United Kingdom: Strong Retail Brands Dominate


UK consumers were particularly definitive about their favourite stores in
the supermarket, department store and health and beauty channels, where
well-known brands dominate the retail scene.

The United Kingdom


recorded the heaviest
online usage in the
food/drink category, with
18 percent of UK consumers saying they had
shopped for food over the
Internet, compared with
the European average of
8 percent.

36

Every retailer should have the brand


strength of Boots, whose 1,400 units
dominate the UK health and beauty market. In a channel where store preferences
tended not to be particularly strong in
most European countries, Boots stood
out, with 36 percent of UK respondents
naming it as their favourite health and
beauty store. Whats more, the company
was well differentiated in consumers
minds, with a significant number identifying product as their primary reason for
shopping at Boots and price as the secondary reason.
The strength of retail brands in general
was quite pronounced in the UK, more so
than in many of the other countries. In
the supermarket channel, for example,
consumers demonstrated strong store
preferences, with Tesco, Sainsbury, Asda,
Safeway and Morrisons leading the list of
favourite retailers. Just 5 percent of UK
respondents couldnt name a favourite
supermarket. Similarly, in the department
store channel, Debenhams, Marks &
Spencer and John Lewis all received a significant number of mentions as favourite
stores. Even in the clothing/shoes/accessories channel, UK consumers demon-

strated stronger preferences than did shoppers in many of the other countries, with
11 percent of respondents naming Next as
their favourite clothing store. In most of
the other European countries, there was
no discernible leader in this channel.
In contrast, the discount channel was
quite weak in the UK, with low usage
and no strong store preferences. In fact,
70 percent of UK respondents could not
name a favourite discount store. This may
point to an opportunity for a strong discount operator to enter the market and
target price-sensitive consumers.
While chains such as Tesco, Sainsbury,
Debenhams and Marks & Spencer exhibit
strength across all of the United Kingdom,
other retailers display strength in specific
regions. For instance, among supermarkets, Morrisons received a significant
number of favourite store mentions in
the Yorkshire, Tyne Tees and Lancashire
regions. Store preference responses for
Waitrose were strongest in London and in
the southern region of the country. And
among department stores, John Lewis was
strongest in London and Anglia. Even in
the case of a strong national chain such as

When they [a mail-order retailer] didnt deliver, they compounded the insult by displaying the most pathetic customer service, which demonstrated a lack of integrity
and honesty on the part of their staff. Needless to say, we will never use them again!

Tesco in the supermarket channel, there


were still significant variances by region.
For example, Tesco was named as the
favourite by 51 percent of respondents in
the Anglia region but by just 17 percent
in Lancashire and Yorkshire.
Differences by age were also apparent in
the results. Asda, for instance, scored well
with younger age groups, particularly 2534 year olds, but less so with those in the
55-64 and 65-plus age brackets. In the
health and beauty channel, Boots scored
highest among younger consumers. It was
named as the favourite store by 45 percent
of respondents in the 15-24 cohort and by
46 percent in the 25-34 bracket, which
speaks well for Boots future prospects,
assuming the chain can maintain its relevancy to these shoppers. Among department stores, Debenhams was strongest in
the youngest age brackets, while Marks &
Spencer scored higher with the 55-64 and
65-plus groups.
In the Internet channel, UK consumers
shopping behaviour was consistent with
Europe overall, with the exception of the
food/drink category. The United Kingdom
recorded the heaviest usage in this category, with 18 percent of UK consumers saying they had shopped for food over the
Internet, compared with the European
average of 8 percent. Gender was clearly a
factor in this category. Nearly one-quarter
of women in the UK said they had purchased food/drink products online vs.
14 percent of men.
Analysts note that the distribution infrastructure for first-generation online retailing is generally quite well developed in
the UK. In addition, they note that theres
been a significant amount of marketing
activity around the online grocery channel, particularly by Asda and Tesco, both
of which claim dominance.

shoppers best and worst experiences


often came down to service-oriented
issues. One man related a story about trying to obtain a rocket model for his son
through a mail-order retailer. They failed
to deliver on an order placed six weeks
before Christmas on an item they claimed
was in stock at the time of order, he said.
When they didnt deliver, they compounded the insult by displaying the most
pathetic customer service, which demonstrated a lack of integrity and honesty on
the part of their staff. Needless to say, we
will never use them again!
Some analysts note that the food safety
scares related to BSE and foot-and-mouth
disease have brought home the importance
of values to UK retailers. Both reliability
and integrity were deemed by UK
consumers to be important values in
terms of the companies with which they
do business.
As was the case throughout Europe,
honesty was also vitally important to UK
consumers. For instance, honest price
was the leading price-oriented factor in
the UK, with 61 percent of respondents
citing it as extremely important.
The impact of honesty on a consumers
relationship with a business was apparent
in our one-on-one interviews. In fact,
honesty on the part of a retailer can even
turn a potentially negative shopping experience into a positive one, judging from a
story told by one UK shopper who visited
an audio retailer just after Christmas.
There was a long but orderly queue at
the till, which I joined, he said. Whilst I
waited for quite a long time, there was an
honest explanation on one of their store
signs that explained that they only
employed people who know about the
product and that this could lead to longer
waiting times at busy periods.

Store Preferences in the UK:


The Consumers View
Company

% saying
favourite store

Supermarkets
Tesco
Sainsbury
Asda
Safeway
Morrisons
No favourite/no answer

29%
20%
17%
10%
8%
5%

Discount Stores
Matalan
Aldi
Lidl
TK Maxx
No favourite/no answer

5%
2%
2%
2%
70%

Department Stores
Debenhams
Marks & Spencer
John Lewis
No favourite/no answer

20%
16%
9%
32%

Clothing/Shoes/Accessories
Next
Marks & Spencer
Clarks
No favourite/no answer

11%
5%
4%
36%

Health and Beauty


Boots
Body Shop
Superdrug
No favourite/no answer

36%
8%
5%
42%

Speciality Stores
Waterstones
B&Q
WH Smith
No favourite/no answer

6%
6%
4%
43%

Note: In an open-ended question, consumers were


asked to name their favourite store in each channel.
Responses are for the country as a whole. As a result,
strong regional retailers may not appear on the list.
Totals for each channel do not equal 100% because
only the top responses, as well as the percent saying
no favourite or no answer are included.
The strength of retail brands was quite pronounced in
the UK, particularly in the supermarket, department store
and health and beauty store channels. However, only a
handful of UK retailers, such as Boots, B&Q and Next,
were well differentiated in the minds of consumers from
the standpoint of the Consumer Relevancy model.

The Role of Values

The importance of values was apparent in


our consumer interviews in the UK, where

37

Case Study
Marks & Spencer:
Finding its Footing in Food
Over the past five years Marks & Spencer
has had more than its share of press
coverage. Unfortunately, not all of it has
been good. From being seen as the rocksolid bastion of UK retailing and prospering as never before (in March 1998, the
company announced profits before tax of
1.2 billion), Marks & Spencer has gone
through an intense period of public and
internal scrutiny, as sales and profits
plummeted, customers left in droves, and
the retailer endured a very public board
battle over the leadership of the company.
Since then, however, Marks & Spencer
has undergone significant change and
restructuring. The makeup of the board
has changed entirely, an outside CEO
(Luc Vandevelde) was appointed and the
company has begun to recapture some
of its former glory and sales.
Despite the turmoil, Marks & Spencer
has managed to remain well positioned
in consumers minds. In our research,
the company stood out as having a clear
primary positioning in the area of product
and a secondary positioning in service.
The company may owe this, at least in
part, to its food operation. Through the
past five years, Marks & Spencers food
business has continued to post modest
positive growth (roughly 5 percent each
year). So how has the company managed
to maintain growth in its food business
given the changes going on around it?
The answer clearly lies in the overall
premise of Consumer Relevancy, which
says that companies that try to be good
at everything are either doomed to fail
or leave significant money on the table.
Instead, companies should establish
a focused, relevant and differentiating
value proposition and then execute
against that strategy. It is in this area that
Marks & Spencer foods has excelled.
Over the past 10 years, the food industry
in the UK has gone through a process of
polarisation, with the growth of massproduced, industrialised, cheap food on
one end of the market and a small but
growing demand for organic and locally
produced food on the other. The UK is
often viewed internationally as being the
benchmark in certain aspects of food
production and distribution, especially
in technically challenging areas such as
chilled foods.
Yet UK residents frequently express a
fundamental level of dissatisfaction
about food. They worry about food
safety, from genetically modified foods
to BSE; they are concerned about the
ethics regarding the manner in which
food is produced; and are distrustful of
supermarkets and the prices they pay
for their groceries. Finally, there is a clear
trend emerging relating to their own
health and well-being and the role that
foods and supermarkets play in that.
38

In this environment, Marks & Spencers


food group has maintained its focused
strategy on product dominance in a
variety of ways and, as a result, has
enhanced its position as a trusted retailer
of food offering better quality than other
retailers:
100 percent own-label products
Only 4,000 lines
A small supply base with dedicated
suppliers in many categories
A unique internal structure
Products that not only meet customer
requirements, but also go just a little
further
Marks & Spencer does not attempt to be
a one-stop-shop price panacea. Instead,
the company positions itself as targeting
a smaller but important aspect of shoppers lives, one that focuses on treat,
quality, trust and solution.
To meet these needs the company invests
heavily in its infrastructure. Internally,
categories operate cross-functionally,
with a clear three-way focus on commercial, development and technology
aspects. Some categories are set up instore to reflect consumer trends such as
health and well-being and celebration.

works as part of a team with food product developers and technologists. This
is due to the fact that many M&S food
products are complex to produce (with
as many as 40 ingredients), technically
difficult to master (chilled precooked
food) and revolutionary in nature (steam
cuisine). Marks & Spencer retains control
over all of its raw materials a key driver
of consistent, high-quality food. The
companys prime objective is to produce
a product of outstanding quality that will
excite and tantalise consumers.
Due to its 100 percent own-label policy,
Marks & Spencer embraces the entire
food chain and is more involved with
suppliers than is typical of more traditional retailers. Suppliers know from the
outset that product quality and product
safety are of greater importance than
volume through the factory. Marks &
Spencer would rather offer a limited
range of products in its stores and risk
customer disappointment on that issue
than risk selling poor-quality products.
The objective of these efforts is to build
trust among consumers trust that they
will get a consistent product, one that
inspires them, that is offered at a fair
price, and that will contribute to their
lifestyles and aspirations.

In addition, the commercial function


(buyers) does not wield overall power but

What UK Consumers Want


Europe Top 5 Responses

% saying
extremely
important

The store is clean and well maintained

71%

Employees are courteous and respectful

69%

The retailer provides consistently good


merchandise quality

67%

The price is easily visible, the price is


well marked

64%

You can unconditionally return merchandise


with which you are unhappy

60%

UK Top 5 Responses

% saying
extremely
important

The retailer provides consistently good


merchandise quality

71%

You can unconditionally return merchandise


with which you are unhappy

68%

The store is clean and well maintained

66%

Employees are courteous and respectful

66%

Staff responds to concerns in a


positive manner

62%

And Dont Want From Their Shopping Experiences


Europe Bottom 5 Responses

% saying
extremely
important

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

14%

You receive phone calls or mail informing


you of sales or special events

13%

The store plays music or videos that


enhance the shopping experience
You can buy from the retailer through
catalogues or mail order
You can buy from the retailer over the Internet

UK Bottom 5 Responses

% saying
extremely
important

You can buy from the retailer through


catalogues or mail order

15%

The retailer offers special financing options


(e.g., hire purchase, monthly billing,
store credit)

10%

12%

You receive phone calls or mail informing


you of sales or special events

10%

10%

You can buy from the retailer over the Internet

10%

7%

The store plays music or videos that


enhance the shopping experience

9%

Endnote:
How to Become
Relevant to Consumers

This report provides an overview of


how Consumer Relevancy plays out
across nine European countries. The
insights contained in the findings
should lead you to ask several questions about the strategic framework
that underpins your own business:
Is your company differentiated in the
minds of consumers in a way that
truly matters to them?
Do consumers understand and care
about your brand position in the
same way that you do?
Can a consumer easily articulate the
difference between your brand and
those of your competitors?
Do all of your senior executives
agree on your brand position and
those of your key competitors?
Do all of your employees understand
the brand position and their role in
supporting it?
In addition, there are key operational
questions you should consider:

Cap Gemini Ernst & Young


Resource Centre
Cap Gemini Ernst & Young has one of the largest global practices focused on
consumer products, retail and distribution (CPRD) companies. Our goal is to help
companies in the CPRD industry transform their businesses by driving revenue,
margin and shareholder value while helping them adapt to market volatility. We
provide management and information technology (IT) consulting services, systems
integration, technology development and design, and outsourcing.

The following CPRD research and thought leadership reports are available for
downloading through our website (click on industries at www.cgey.com):
Searching for the Global Consumer: A European Study of Changing Lifestyles and
Shopping Behaviour
Point of View Consumer Relevancy: Changing the Rules for Corporate Success
Point of View Customer-Driven Transformation: Operationalising Consumer
Relevancy
Point of View State of the Art in Food: The Changing Face of the Worldwide
Food Industry
2001 Consumer Goods Technology Trends Research Report
Third-Party Logistics Study: Results and Findings of the 2001 Sixth Annual Study
The Shopper Report: 2001 Consumer Relevancy Awards
Excerpts from The Myth of Excellence, the best-selling book that focuses on our
Consumer Relevancy methodology
Coming soon

Point of View Consumer Relevancy in the CPG Business: Leveraging Context to Build
Brands (May 2002)
2002 Shopper Awards: How Consumers Rate Retailers (May 2002)
Retail Technology Report 2002: Aligning IT with Strategic Objectives (June 2002)

Are all of your business processes


and information technology applications aligned to deliver your brand
promise efficiently and effectively?
Do all key process owners understand their role in delivering the
brand promise?
Are performance metrics aligned?
Are all current internal projects
aligned with your brand promise?

The Myth of Excellence

The answers to these questions will


help you build a business model that
drives growth and profitability and
strengthens your competitive positioning through a value proposition that is
truly meaningful to consumers. While
space constraints make it impossible
for us to include all the results garnered from our European research and
more detailed recommendations, we
would be happy to share additional
insights to help transform your company into one that is truly relevant to
todays and tomorrows consumer.

They are also among the companies profiled in the


business best-seller The Myth of Excellence, written
by Fred Crawford, Executive Vice President and
Global Managing Director, Cap Gemini Ernst &
Youngs Consumer Products, Retail and Distribution
practice, and Ryan Mathews, a futurist with
FirstMatter (Crown Business). Based on survey
research with thousands of customers and in-depth
interviews with hundreds of senior executives, The
Myth of Excellence introduces the strategic concept
of Consumer Relevancy.

For more information on Consumer


Relevancy in Europe, please contact:
Nina Groothuijzen, +31 30 689 6243,
nina.groothuijzen@cgey.nl

What do Wal-Mart, Dollar General, Superquinn and


Campbell Bewley Group have in common? These
companies all embody the principles of Consumer
Relevancy in their operations. They understand
what customers today are looking for from their
goods and services providers and have learned
how to speak the new language of consumers.

About Cap Gemini Ernst & Young


Cap Gemini Ernst & Young is one of the largest management and IT consulting organisations in
the world. The company offers management and IT consulting services, systems integration, and
technology development, design and outsourcing capabilities on a global scale to help businesses
continue to implement growth strategies and leverage technology in the new economy. The organisation employs some 56,500 people worldwide and reports 2001 global revenues of about 8.4
billion euros.
39

www.cgey.com

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